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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" 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: mungofitch 🐝🐝🐝 GOLD
SHREWD
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Number: of 21944 
Subject: Re: OT: Interactive Broker question
Date: 09/24/25 4:28 AM
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No. of Recommendations: 15
So, I guess, I own in the high double-digits of different shares. So people ask what I don't simplify my life and just buy an ETF or two.

I totally support a broad portfolio, if there is a reason for it. A lot of folks say that a diversified portfolio will necessarily come to resemble the return of an index, approaching its return asymptotically with the number of positions. But that's true only if the stocks are chosen at random, not if they are chosen in any other way. Presumably yours are not chosen at random.

Fun with numbers: Does a 75 stock portfolio closely match the S&P 500? Many commentators would say yes.
Pick the most boring metric in the world, P/E ratio.
Of the ~1700 stocks in the Value Line report, buy the 75 with the lowest earnings yield. Hold two months and repeat. After trading costs, lagged the S&P 500 by -9.6%/year in the 39 years to end 2024.
Of the ~1700 stocks in the Value Line report, buy the 75 with the highest earnings yield. Hold two months and repeat. After trading costs, beat the S&P 500 by +1.7%/year in the 39 years to end 2024.
Difference: 11.2%/year.

Same test with top and bottom 75 by ROE instead of P/E, difference 7.5%/year. And so on.
A broad portfolio can diverge wildly, if the picks aren't random. If you hold lots of positions, don't feel bad about it!

Jim

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This community has written 21,448 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 · 57 recs · 2023
Summary of 2Q 2026 · 54 recs · 2026
3Q Summary · 53 recs · 2024
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