Masterofnone

Twenty years ago we wanted to start a little fund for a newborn nephew. In addition to eventually being perhaps some higher ed. funding, we wanted it to be a teaching tool on compounding. Figured chips, oatmeal and Gatorade would be understandable at any age and had a very high probability of continued success over twenty years. Wouldn't be much of a lesson otherwise. That PEP drip has modestly outperformed the S&P over the two decades. Actually in the scope of all businesses, Pepsico is perhaps one of the easiest to figure out. Regardless of what you think of carbonated sugar water and combinations of grains and fat, they will grow with the economy plus a little bit because they have leading world brands in products that light up human pleasure centers. That "little bit", compounded over decades, amounts to substantial out-performance- especially for the effort required.

I'm retired. Berkshire 60% (44% held 20 plus years and 40% from 2008-2011) Fairfax 7% Calloways Nursery 4% PCYO 3.5% PX 3% BERY 3% TFC/WFC 3% BC 2% BABA 2% FFXDX 2% CMCL 1% 8-10 misc. small positions to keep my attention all < .5% Treasuries/ high yield savings 5% I've "diversified" from 25 years of a "portfolio" of 85% BRK

I had limited time, skills and experience when I first started investing. Like many here, learning about Buffett and Berkshire just resonated. The rationality, downside protection and internal diversity made it the standard against which any other capital allocation was judged. I knew I was dumber than Buffett and just piled on whenever it seemed relatively cheap. Was up to 90% at one time. But Berkshire is unique and it is the only security I'd ever recommend to someone who asked. (because of that downside protection- the quote might get cut in half but the businesses....) Would that work for a new investor now? Hard to say with Buffett unlikely to be at the wheel for a new person's horizon. That said, in an area where you have special expertise and you see an opportunity, why not dive in? what good will it do you to invest by the teaspoon if you truly have a good idea? Trouble is, new investors seldom really have special expertise. I happened to sell my little business toward the start of the pandemic. We were having a spectacular season of sales. Took the proceeds and invested in a public company in the same line of business. Kept the concentration even after the stock popped because I have long experience in the industry and feel comfortable with the future. But with most areas, the future is full of perils and you really have to have LUCK on your side.

Stevie, you have started a fine discussion, even though it is only tangential to the thread topic. I have found it helpful to have a much smaller "funny money" account to satisfy the need to do something. Playing the Parsad/ Schloss game is fun, though I have found that I don't particularly excel at it. Selling at the "right time" is really difficult. Spek is correct that going into business for yourself is usually just making up your own job to do. This can be wonderful though, if you love the work. It is great to be your own boss if you largely enjoy each day and a great way to control the work/life balance.

Dealraker has been consistent in his message. He was around 25 years ago on the very first active stock message board-Yahoo. He pointed out that Berkshire fit the bill as a company worth partnering with. You don't need too many good ideas with this framework and as Buffett has often said, if you have a new idea you should always ask "is it better than the other ideas you have acted upon?" I first bought Berkshire at what was a terrible entry point in 1998. Took five years for the stock to catch back up to the very dear price I first paid- but even those ill-timed shares have done just fine over time. If you partner with the right people, time is really all you need. And when you really get to know your partners, you can just confidently add when folks will sell more to you cheap. After that first purchase with lots of reading and help from folks like Dealraker, I learned better when to add and just rode that single pony (largely) right on into retirement.

I started investing in 1998. After a few false starts I stumbled upon Berkshire and Buffett. Like many here, the logic of the process clicked. I went to the "new" message boards of the time and got perspectives- one of which was from old Dealraker himself. Basically spouting the same line- find a good business with a damn good chance of being around in 30 years and hold on. I got more and more comfortable with Berkshire and just kept buying whenever it got cheap. I loved that Berkshire afforded protection for me in down markets. (and the past 10 years haven't had much down time... and BRK has still done fine.) Since 1998 it has comprised over 75% of my portfolio and I sleep well. I'm from modest means and will eventually get to give a bunch of money away. So, not to speak for Dealraker, but the first criterion of a "wonderful business" is one that has a great chance of existing in 30 years. Those long tails never get included in discounted cash flow valuation. I'd venture that "future future" earnings is the secret sauce behind most of WEB's acquisitions. Avoid "political risk" and most things dependent on consumer preference. Just look for companies like the ones Warren and Charlie bought. Worst that can happen is what Dealraker experienced- they might buy you out on the cheap sometime. A few ideas? BRK CSL HD GWW, DHR, CLWY FAST

Just look at the Berkshire wholly owned companies. WEB gets his extra value over goodwill from the durability of the earnings stream. Shoes didn't work, but the vast majority of these businesses will be profitable in 20-50 years. None of them are sexy.

When our nephew was born we wanted to give him a small teaching tool. We started a DRIP account with five shares of PEP. Soda, chips and Gatorade, regardless of the nutritional value, were pretty certain to be around when it was time to set off in life and it was pretty easy for a kid growing up to see how the business worked. Over his twenty years, with dividends reinvested, it has beat the S&P by a small but meaningful margin. We wanted an example of compounding and thinking long term. Should be doing just fine in 20 more years. It took a fair amount of thought to pick the stock. Did I invest personally? Yup, 10 shares in a DRIP....... Hah.