Berkshire Hathaway as part of the mix?

[nisiprius]

...I will say that the Buffett quotes about investing in the SP500 were meant for his estate left to his wife...

Absolutely not "just for his wife." He recommends it "for most people."

CNBC reporting his remarks at the 2020 annual meeting

In my view, for most people, the best thing to do is owning[sic] the S&P 500 index fund.

That's not a one-off, he's said almost the same thing repeatedly.

(To the best of my knowledge, he has never explicitly clarified if he means "no small-caps" and "no international stocks.")

[nedsaid]

Remember, Buffett is a value investor in the way of Benjamin Graham. So, a few points to keep in mind and if you are aligned with his belief, then it is a good investment. A few items:

1) His investment horizon is generally "forever". He looks to buy things undervalued then hold them a very long long time waiting for the economy to catch up. This means there are movements in the market, which can be very long in duration, where he looks like he missed the boat. He is fine with that (As are all BG disciples). He is anything but a short term investor and, for him, short term can be like 10 years.

2) He holds a lot in cash. Again, a BG disciple who believes he will never ever have to sell positions just to raise cash. I think he and Munger declared they will always have $20bl in cash / cash equivalents so he can pounce (as he did in the financial crisis) when needed. As of their last 10Q they have in cash, cash equivalents and short term investments (Treasury Bills) $105bl.

3) A lot of his investments are in companies and most of these companies are in the "infrastructure" category. He makes houses, bricks, drives cargo in trains, and owns energy, lots of energy. This is not sexy - no electric cars, fancy cloud computer etc. etc and certainly no bitcoin and gold. The closest he comes to sexy is his significant investment in Apple.

4) I know he and Munger are old but based on listening to the last annual meeting, Greg Able appears to be following exactly in these footsteps.

So, absolutely nothing wrong with buying Berkshire as long as you absolutely subscribe to these beliefs. These are values to him like religion is and this will guide where your investment goes and what it does.

Hope that helps.

Also remember that Buffett has tweaked his approach, he was heavily influenced by Charley Munger who famously said, "It is better to buy a great company at a good price than a good company at a great price. In other words, Buffett no longer follows a strict Benjamin Graham approach. He now is concerned as much about the quality of a company as he is concerned about its valuation. It would be fair to say that Buffett is Value oriented, I don't think he is really a strict Value investor anymore. More like Value plus Quality or even Growth At A Reasonable Price investor.

[steadyosmosis]

I was hoping to get some insight as to how Berkshire may fit into some people’s portfolio mix? I don’t really know much about the company . Buffett seems to have produced some good returns over the years.
What are the downsides to owning this stock? Could one make a case for having it as a major core holding ?

I think it unusual (but admirable) for a CEO to recommend investing in something other than their own entity, yet that is what Warren Buffett did.
So, accepting that I am an 'average investor', I took his advice, sold my smallish holding of BRK.B, and invested in an S&P 500 index fund.

[TomatoTomahto]

I was hoping to get some insight as to how Berkshire may fit into some people’s portfolio mix? I don’t really know much about the company . Buffett seems to have produced some good returns over the years.
What are the downsides to owning this stock? Could one make a case for having it as a major core holding ?

I think it unusual (but admirable) for a CEO to recommend investing in something other than their own entity, yet that is what Warren Buffett did.
So, accepting that I am an 'average investor', I took his advice, sold my smallish holding of BRK.B, and invested in an S&P 500 index fund.

I’m an average investor, but our one share of BRK.A (in taxable) will be for the kids to convert to B shares and take the capital gains step up. We are not adding to BRK.

[steadyosmosis]

I was hoping to get some insight as to how Berkshire may fit into some people’s portfolio mix? I don’t really know much about the company . Buffett seems to have produced some good returns over the years.
What are the downsides to owning this stock? Could one make a case for having it as a major core holding ?

I think it unusual (but admirable) for a CEO to recommend investing in something other than their own entity, yet that is what Warren Buffett did.
So, accepting that I am an 'average investor', I took his advice, sold my smallish holding of BRK.B, and invested in an S&P 500 index fund.

I’m an average investor, but our one share of BRK.A (in taxable) will be for the kids to convert to B shares and take the capital gains step up. We are not adding to BRK.

Ah, good point (taxable account). Thank you. And I would do the same in your situation.

[wmd36]

So other than a broad macro type risk that affects the entire market , what do we see as the biggest risk to Berkshire as a stock? One of its largest holdings going bankrupt, some insider fraud type event ?

[steadyosmosis]

So other than a broad macro type risk that affects the entire market , what do we see as the biggest risk to Berkshire as a stock? One of its largest holdings going bankrupt, some insider fraud type event ?

Yes, perhaps those you mentioned, but I also doubt that future management of Berkshire can do any better than Buffett (age 92?) has, especially during the past 15 years.
Buffett foretold that it would get more and more difficult for him (and Charlie) to beat the index, as their assets grew.
Since I was able to sell in a non-taxable event, I decided to spread my risk across 500 companies, instead of the fewer owned/held by Berkshire.
(Full disclosure: My risk is really spread across many more than the S&P 500, because I also hold total US index ETFs and total international index ETFs.)
Besides, in US indexes, Berkshire is in the top ten largest holdings, so I still own some in that way.

[Northern Flicker]

...I will say that the Buffett quotes about investing in the SP500 were meant for his estate left to his wife...

Absolutely not "just for his wife." He recommends it "for most people."

CNBC reporting his remarks at the 2020 annual meeting

In my view, for most people, the best thing to do is owning[sic] the S&P 500 index fund.

That's not a one-off, he's said almost the same thing repeatedly.

(To the best of my knowledge, he has never explicitly clarified if he means "no small-caps" and "no international stocks.")

He has. In one interview transcript I saw he explicitly said with respect to retirement savings that "the trick is to hold only large cap stocks."

[doobiedoo]

So other than a broad macro type risk that affects the entire market , what do we see as the biggest risk to Berkshire as a stock? One of its largest holdings going bankrupt, some insider fraud type event ?

BRK risk is that it underperforms the SP500 index .

[JasonHutt]

I have Berkshire in Large Cap Blend (S&P) and Large Cap Value (Vanguard Value Fund).

[Cannoli]

Even Buffett said if you want to own a conglomerate well that's what the S and P 500 is

[Outer Marker]

...He holds a lot in cash. Again, a BG disciple who believes he will never ever have to sell positions just to raise cash. I think he and Munger declared they will always have $20bl in cash / cash equivalents so he can pounce (as he did in the financial crisis) when needed. As of their last 10Q they have in cash, cash equivalents and short term investments (Treasury Bills) $105bl.

... A lot of his investments are in companies and most of these companies are in the "infrastructure" category. He makes houses, bricks, drives cargo in trains, and owns energy, lots of energy. This is not sexy - no electric cars, fancy cloud computer etc. etc and certainly no bitcoin and gold. The closest he comes to sexy is his significant investment in Apple.

Yep. Warren holds a lot of cash and has a good track record of when and where to deploy it. I like that his number one motto is "Don't lose the money." I received about $250,000 in 2021 from the sale of an inherited property and could not figure out what to do with it. (I know the right BH answer was just to deploy it all according to my AA.) But PE of the market was very high by historic measures and bonds were paying nothing, so I gave the cash to Warren to look after. He's done well with it over that time and relative to the market. Shrewd purchases of Chevron and Occidental before the market had piled in. At 8%, it's a bit more than the recommended limit on "play money" in my portfolio, but I don't think it's a harmful indulgence.

[JSPECO9]

As Bogle says, go for it. Life is short.

[KarlJ]

Becky Quick interviews over the years of Buffett and Munger are on the YouTube video "Warren Buffett & Charlie Munger - A Wealth of Wisdom | CNBC", where the revolutionary concept of running a conglomerate with hands-off management was initiated at Berkshire Hathaway, and not used by any other conglomerate.

https://youtu.be/sP3TZXJiFtw

As a large value holding, I intend to allocate my 5% discretionary account to BRK.

Edit to remove "Funny Money" as 5% in individual stocks is "Serious Money" to me

[Outer Marker]

Apropos of this discussion, a great lecture by the man himself on the principles that have guided Buffett in business and investing.
https://www.youtube.com/watch?v=63oF8BOMMB8 I found especially interesting his perspective that whether you're buying a bond, or buying a stock, you're buying the future cashflow produced by the asset. Bonds are easier to figure out because the terms are printed on the bonds. Cashflows aren't printed on stock certificates, so there is a lot more uncertainty, but potentially much greater rewards.

[alex123711]

Is it worth holding just due to the tax advantages? No distributions/ dividends etc.

[CC1E]

The major risk is that Warren And Charlie don’t have many years left. Who knows what happens when they’re gone.

[captain2012]

I like the concept too, but I’d say this forum is not the best place to discuss any single stock, you’d probably get lots of negative comments on owning any single stock here.

[TomatoTomahto]

I like the concept too, but I’d say this forum is not the best place to discuss any single stock, you’d probably get lots of negative comments on owning any single stock here.

Well, you won’t get a negative comment from me. We have one share of BRK.A in taxable. I like the fact that it doesn’t pay dividends. We have no plans to add to our holding and the kids will have to break it into shares of BRK.B to sell when we die.

[Normchad]

I like the concept too, but I’d say this forum is not the best place to discuss any single stock, you’d probably get lots of negative comments on owning any single stock here.

Well, you won’t get a negative comment from me. We have one share of BRK.A in taxable. I like the fact that it doesn’t pay dividends. We have no plans to add to our holding and the kids will have to break it into shares of BRK.B to sell when we die.

I definitely like the idea of having something in taxable that is so very tax efficient. For those trying to manage their MAGI, BRK is worth a look.

[WestCoastPhan]

This is not sexy - no electric cars, fancy cloud computer etc. etc and certainly no bitcoin and gold. The closest he comes to sexy is his significant investment in Apple.

Just FYI, BH has ~$10 billion in Chinese electric car company BYD. BH has done very well with it, though Tesla has performed much better over the 15-ish year hold period so far.

[smooth_rough]

This is not sexy - no electric cars, fancy cloud computer etc. etc and certainly no bitcoin and gold. The closest he comes to sexy is his significant investment in Apple.

Just FYI, BH has ~$10 billion in Chinese electric car company BYD. BH has done very well with it, though Tesla has performed much better over the 15-ish year hold period so far.

BRKB dipping below 300. Time to buy more?

[abuss368]

Berkshire Hathaway is approximately 30% of our total investable assets. Shares were first purchased in 1978.

Wow! Jack Bogle has said that no investor should own individual stocks as the risks are too great.

What happens on the day Warren Buffet decides not to come into work?

Best.
Tony

[Outer Marker]

Berkshire Hathaway is approximately 30% of our total investable assets. Shares were first purchased in 1978.

Wow! Jack Bogle has said that no investor should own individual stocks as the risks are too great.

What happens on the day Warren Buffet decides not to come into work?

To call Berkshire an “individual stock” is a vast oversimplification of what it is. Berkshire wholly owns on the order of 30 companies ranging from Duracell batteries to NetJets, not to mention GECIO and a huge stake in Apple. It is very efficient to hold in taxable as it pays no dividends. There is a well established succession plan made in Buffet’s mould who are largely doing the day to day work already. It will be a sad day when Warren passes, but the great business he established will soldier on.