Halls of Shrewd'm / US Policy❤
No. of Recommendations: 14
You make the core part of your portfolio a broad index, and then you put whatever you want around it.
So, start out with a basic index, be very tax-aware of what you do, and then back to the behavioral stuff: Don’t interfere with the market’s ability to compound.
The crazy thing about Warren Buffett: His wealth has doubled over the past seven years. Think about how insane that is. He’s 94, like half of his wealth came about from zero to [his late eighties], and the other half came about in the last seven years. That’s the miracle of compounding.
https://www.cnbc.com/2025/03/28/investors-will-be-...I thought it was great advice for most savers/investors. Of course the advice may not apply to the many superinvestors who are denizens of this board.
No. of Recommendations: 13
The crazy thing about Warren Buffett: His wealth has doubled over the past seven years.
I assume your math is right--
Even more impressive if you remember that he's given away [another] 30% of his shares in those seven years. If I did my sums correctly, the shares donated just in that stretch have a current market value of roughly $56 billion.
Jim
No. of Recommendations: 16
Morgan Housel points out that Buffett was worth about $3.8 billion at age 65. Now at age 94, that investment in BRK--including the portion he has given away--is worth about $365 billion. Which is to say 99% of that wealth came after age 65.
Compounding is helluva thing.
No. of Recommendations: 9
Buffett was worth about $3.8 billion at age 65. Now at age 94, that investment in BRK--including the portion he has given away--is worth about $365 billion. Which is to say 99% of that wealth came after age 65.
A financial illustration of Zipf's law.
As we talked about on the TMF board a couple of decades ago, the first comma is the hardest.
At Christmas I had a family discussion about investing for retirement with my son and his wife (with 3 youngsters), we (my wife and I) always bemoaned that when you are a young family and need the money badly, your income is low, but later in life your income is highest but your kids are grown and gone so your expenses drop a lot. Too bad life isn't the reverse, so you'd have the most income when your expenses were highest.
DIL kind of hoped that this was the lead-in to us giving them a large check. Sadly for her, not the case.
No. of Recommendations: 5
>>Compounding is helluva thing.
Longevity too.
After all, 29 years is roughly the length of a pretty typical investing career.
Jim
No. of Recommendations: 7
Well done. Money when you’re young and don’t earn it yourself teaches you dependency, fear of spending what you don’t know how to make yourself and trying to live up to something you’re really not.
— My words, from reading, The Millionaire Next Door, the largest research study on millionaire’s ever published. Sixty plus pages on which giving styles are most effective (and most destructive) on the lives of millionaire’s children.
Highly recommend. Will put in the books section, as well.
No. of Recommendations: 11
You make the core part of your portfolio a broad index, and then you put whatever you want around it
Excellent advice. I recommend my to my family (and whoever else might ask) that they follow it.
Uh, I didn't.
I don't remember the exact numbers (and as I've posted here before) but the essence was that sometime during spring break 2000 (I remember in moments between herding our children I was checking my email from the hotel near Lego Land), I had taken almost all of my 401(K) (between $60-$65K) and buying a single A share of BRK with it (for around $58 - $62K).
Occurred to me this morning on reading the above that today was the 25th anniversary, more or less, of that purchase.
Yahoo financial says as of this moment, the Mar 31 2000 - Mar 31 2025 appreciation of BRK has been 1,367%, and that of the S&P 500 274%
Of course, the S&P has dividends
I'm too lazy to do the math the right way - much less dive into the tax implications of dividend interest in my peak earning years, but Perplexity tells me approximating 1.8% or so would be about right.
So (1.018)^^25 = 1.562. So, roughly right is kinda 274% times 1.56, or 428% total return to the S&P index over the 25 years ending today.
About a thousand percent less than Berkshire.
A few years later, Charlie Munger made the comment to the effect that the key was to not make many moves, but when you did, do them decisively and using enough of your chips to make a difference.(1)
-- sutton
counting the BRK core as one of the half-dozen best decisions of my life
(1) "Our experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past". - CAM, Poor Charlie's Almanack
No. of Recommendations: 2
No. of Recommendations: 1
When I was still working, I would get used copies of The Millionaire Next Door and give them to coworkers that had just started their careers. At least some of them got it and will do well.
No. of Recommendations: 0
I head that if he did not give money to charity, he would be worth something like 500 billion.
No. of Recommendations: 6
Yes indeed! With the rule of 72, at 10% per annum, if he was to double his money every 6-7 years or so, by the time he turns 100, 1 trillion is looming? Imagine if WEB had the genes of Irving Kahn, who lived to 110. Just think of that compounding miracle if he were to live that long. Incredible! 99% of his wealth was created after age 65? And 99% of his wealth was all in, LTBH with Berkshire. How many here have the cajones to be all in at 99% like him? I don't blame you for saying, "NOT ME!" Someone said recently they are 95% (I salute you!)...our old friend, Hartmanbirge was 90%. I was 85% last year, and took some off the table at $472 in my Roth and put it into an Intermediate Bond Fund....that brought me down to 79% in BRK....big mistake...should have left it alone or put it into T-Bills. I'm just breaking even in that lot. Now, I'm back up to 82% in BRK. Still have a boatload of BRK in my 401k which I can unload at anytime with no taxable event. Waiting for an exit price, and feel like I'm getting ready to pull the trigger...it's tempting at these prices. If I exit with that lot, I'll be down to 60% BRK, and I'll stop there. That not too inconsiderable remaining chunk is in my taxable brokerage account going way back to the late nineties and will remain LTBH until I'm 6 feet under. Too big of embedded gains for me to ever consider bailing out. It is earmarked for a handful of charities that I care about with a step-up in basis and no tax consequences to my estate upon my demise.
No. of Recommendations: 1
" I head that if he did not give money to charity, he would be worth something like 500 billion."
Obviously, Buffett being so generous, is a beautiful thing. However, don't forget he added 50 billion plus of his shares to the float. IF, he was selfish and had not donated any of his shares, yet, the stock would be higher as a result of the decrease in supply. Just sayin.
No. of Recommendations: 2
yes, I fluctuate between 75-80% excl.property of my total PF. the other 25% is trading around the edges.....its gotten me a few extra BRKB over the years, so , grosso moso, its been a good strategy , but probably not (much) more than I could have gotten by doing nothing. as I am in "drawdown" phase of life and have been for quite a while ( afforded to leave the grind behind in my early 50's), thus far, its worked for me and I still find my PF increases each year, mainly due to BRKB and leaving it alone.
I have been banging my neices and nephews heads over BRK and compounding for years...they are starting to "get it" ...one of them is very helpful to me, and I reward him occasionally in in BRKb's. :-)
No. of Recommendations: 17
don't forget he added 50 billion plus of his shares to the float. IF, he was selfish and had not donated any of his shares, yet, the stock would be higher as a result of the decrease in supply. Just sayin.
I hear you sayin', but that's not the way stocks work.
If somebody A sells a bunch of stock to somebody B, that doesn't change what C and D and E think the stock is worth, other than during the few moments of the trade if A is selling at market. C and D and E are looking at how the business is doing (as well as a bunch of irrelevant stuff), and they are very very numerous, so it's their bids and asks that determine the market price.
The price of an A share today is within a few cents of being the same as it would be with or without selling by Mr Buffett or the foundations.
Jim
No. of Recommendations: 2
" If somebody A sells a bunch of stock to somebody B, that doesn't change what C and D and E think the stock is worth, other than during the few moments of the trade if A is selling at market. C and D and E are looking at how the business is doing (as well as a bunch of irrelevant stuff), and they are very very numerous, so it's their bids and asks that determine the market price.
The price of an A share today is within a few cents of being the same as it would be with or without selling by Mr Buffett or the foundations.
Jim"
Always appreciate you teaching how, it works old bud. Let's try something very simple. IF Buffett decides tonight that brkb is currently trading 20 percent above IV, and he files an 8 K disclosing that he will be gifting 150 BILLION worth of brkb to the foundations this Friday, with instructions to sell it all this year, how might the stock react to that news?
1- no harm no foul,
2- the stock may sell off a few cents,
3- the stock will rise because more supply in the float is bullish,
4- the stock might sell off more than a few cents because all those shares added to the float have to be absorbed by buyers.
As always, thanks for your reply.
