snowglobe
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Posts posted by snowglobe
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I think it's all about tail risk of the permanent variety (not volatility).
Buffett's performance among many other things can be accounted for by a simple mantra: "leverage sure things and be patient until you're sure". The best stocks in the SP500 have done about 25%-30% compounded over the last 10 years in a raging bull market (except for some true outliers TSLA etc.). Realistically, a handful of stocks that do 15% plus some modest leverage is good enough to achieve a really good performance.
So position sizing to me is really dependent on how the distribution of outcomes look for any particular stock. Humans generally have a hard time mentally calculating geometric means, but this is crucial for investing, so I think getting some intuition via some Monte Carlos rollouts is a useful exercise.
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Munger said "There'll be one big advantage for the shareholders that pay taxes. The Berkshire shareholders - even if we just match the S&P we'd be way ahead after taxes".
I'm not understanding the mechanism here. Why is this true? If BRK.B matches SPY, and I incur a capital gain on both of them, and I have to pay capital gains tax on both of them, how are the Berkshire shareholders ahead on an after-tax basis?
Can someone explain please?
Will BRK underperform S&P500 if BRK held S&P 500 as Buffett says?
in Berkshire Hathaway
Posted
How does Berkshire get taxed on dividends received from its public market investments such as AAPL. Does 50% of dividends received get taxed at the 21% corporate tax rate?
Here, it says:
A US corporation generally may deduct 50% of dividends received from other US corporations in determining taxable income. The dividends received deduction (DRD) is increased from 50% to 65% if the recipient of the dividend distribution owns at least 20% but less than 80% of the distributing corporation.
https://taxsummaries.pwc.com/united-states/corporate/income-determination#:~:text=Dividend income,80% of the distributing corporation.
Warren is really fighting an uphill battle, with gigantic positions he can't move in and out of, and a hefty tax bill to fight.