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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", sykesix asked the members: "What do you do if you arrive early at movie besides go to the snack bar?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: rrr12345 ⎊  😊 😞
Number: of 22991 
Subject: Re: Jim Grant on Berkshire/Cash/Valuations
Date: 10/29/24 4:54 PM
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What do members here think T-Bills, the broad stock market index and Berkshire's equity portfolio will return over the next 5-10 years?

In nominal terms I would guess something like 4.5% for T-Bills (the current yield), 3.5% for the S&P 500 (the trailing twelve months earnings yield) and 5.5% for Berkshire Hathaway's equity portfolio (S&P 500 plus 2 percentage points). If this is more or less correct, then a very high allocation to T-Bills makes sense.

If I'm allocating based on my estimated returns for the next 30 years instead of 5-10 years, then I would up the estimated S&P 500 return to maybe 8% (historical return of 10%, minus 2 percentage points for reversion to the mean, trailing P/E of 17). In that case my allocation to T-Bills would be quite low.

What is your thinking? Even if we don't want to give numbers out loud, we are still making bets in our portfolio allocations. I hope we all guess right, or what's right for us.
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This community has written 22,499 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 58 recs · 2023
Summary of 2Q 2026 · 55 recs · 2026
3Q Summary · 53 recs · 2024
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