Milu

Yes agree with most of this, current price (even after today's drop) is still slightly over what I'm willing to pay but we are getting closer.

yes you make some good points, but there are probably more counter examples where the succession hasn't worked out, but we are less likely to hear of those due to survivorship bias. If we take buffets whole investment philosophy as an example, he has typically avoided investing in situations where he doesn't feel comfortable predicting the dynamics of the business in 10 years and 20 years time, hence his historical avoidance of tech. It seems like most people can't confidently predict how Berkshire will play out post Buffett (pay large dividends, sell off certain subsidiaries, focus on operations vs acquisitions), basically the future is nowhere near as clear as it would be if Warren was in charge. I suppose the only thing we can almost say with some confidence is that things will not be the same as they are now.

Ya this seems to be a hard concept for people to grab. Steve Jobs didn't do the industrial design of the iphone, write the code for IOS, design the chips, battery technology etc. He also didn't have whatever degree seems to be needed by previous posters to be 'allowed' to do this. Must start adding a few more questions to my investment checklist going forward - Does the CEO have the necessary Education Degree - Did the CEO invent and design every component in the product themselves In fact I think if Elon wants to legitimately run Space X he should get some PHDs in Physics, Chemistry, Mechanical Engineering, Electrical Engineering lest he be seen as a charlatan by some folk.

Thanks for the responses so far, interesting perspectives. I have mine in a tax deferred account so the cap gains isn't a consideration. Succession is always one of the most challenging things to pull off so no matter how much we have faith in Buffett to set up his legacy well the truth is nobody has any idea how it's gonna play out. So this leaves two choices. 1. Hold the stock, give the new mgmt time to settle in, if they start making bad decisions sell the stock, which could have possibly already dropped a lot due to these bad decisions 2. Sell the stock, give new mgmt time to settle in, if they continue to execute well, then buy the stock, which could have possibly already gone up a lot due to good decisions. Gonna be interesting to see how it all plays out. Maybe it will just trundle along at a middling rate.

I'm a Berkshire holder like a lot of members of this forum. I've learned more from Warren and Charlie than probably anybody in my life. The only reason I bought Berkshire was because I believed in their investment skills and their respect for shareholders capital. I've read and listened to about everything written by or about them so feel like I knew them even though we never met. When I buy my own stocks I would never buy insurance companies, railways, energy companies, yet these type of businesses are the main entities Berkshire owns. I don't really know much about Ajit Jain, other than the nice words Buffett and Munger have spoken about him, same for Greg Abel. While they might be great operators I have no insight into how good or not they will be at allocating capital. With Todd and Ted I also don't have much of a sense of how well they have performed or what their involvement will be once Buffett is gone. I suppose what I'm trying to say is that if Buffett's capital allocations skill was the main reason I invested in Berkshire, should the end of his time as a capital allocator be the time for me to sell. Curious to see how others think about this?

Be sure to let me know who the 'next guy' is once you come across him. Would love to invest

I've been a fan of Musk for a long time. Bought the stock in 2011 I think for an initial price of $32 a share(it's split so many times I don't even know what my split adjusted price was), I believe it IPO'd in the high teens so I've done quite well to say the least. While I think he's great it doesn't mean I agree with everything he does. Wish he didn't waste so much of his time on twitter, didn't like it when he accused that cave diver guy of being a pedo, shilling for Trump is likley something he will come to regret. But as you said above anybody who calls him overrated or a charlatan needs top get their head checked. The guy is without doubt the most transformational Entrepreneur any of us will ever see in our lifetime when it comes to doing the impossible. That type of person isn't going to fit into the mould of a manager-operator like Tim Cook or Satya Nadella so you kind of have to accept the good and the bad of such an extreme personality.

You seem quite hung up on what degree type somebody has and how that should prevent them from innovating in certain industries. Didn't realise this was still a thing for people.

Here's a recent video of Jensen Huang of Nvidia discussing Musk. I suppose Jensen is probably overrated as well so probably best to ignore. https://x.com/StockMKTNewz/status/1845595236917289207

I'll never get my ahead around the Musk haters in the Tesla thread who never seem to appreciate the amount of truly groundbreaking things that he has spearheaded.

Interesting chart, I'm very surprised how low the Forward P/E was in 06/07, considering this was the peak of the market before the credit crisis. I do always find the forward P/E a tricky metric to assess as it's essentially using a guess what earnings are going to be for the next year, and we know how accurate humans are with guesses. It would be interesting to see a 20 year table comparing the forward estimate of S&P earnings with the actual earnings for that year. I wonder what the average margin for error is and what have been the largest errors? If it's typically within plus or minus 10% then it would be a useful metric, if it's been off by 20% plus then less so. If anybody has that info, it would be great to see.

Good point

Ya it's hard to even know what a 'sophisticated' crypto investor is anyway. A lot of people read a book or listened to a Michael Saylor podcast interview and assume they've 'done the research' but in reality they are just speculating hoping the price will go up. I hold some bitcoin (bought in 2020) after being a skeptic for 8 years when my good friend continuously pushed on me how game changing it was going to be, if only I'd listened when he was burning my ear off in 2012 and 2013. I was influenced quite a lot by austrian economics and have a philosophical problem with the current debt-fueled culture and continuous money printing we've had for the last 15 years. I like gold too and hold some, but strongly believe bitcoin is the continuation of gold. Both assets provide an escape valve from the system and the hope is that they will allow me to maintain purchasing power over the long term (while having some volatility in the short term). Ideally I'd have all of my portfolio in reasonably valued equities but I generally end up having a decent cash balance (30%+) and over time I'd gradually like to transition this from debt based assets like t-bills into 'harder' assets like bitcoin and gold.

Any bitcoin held off exchanges on hardware wallets etc I would expect you wouldn't be covered, but I would think that the value of any bitcoin etfs held would have the exact same coverage as any other etfs. I'm not too sure what's covered by governments in the event that your brokerage account got hacked or drained. In Ireland we are covered by the EU deposit guarantee of up to 100k for bank deposits, but I don't believe brokerages fall under this. If I look at interactive brokers website it references the following, which isn't gonna help much if you've got hundreds of thousands or millions in your portfolio. "Certain clients of Interactive Brokers Ireland Limited are protected by the Irish Investor Compensation Scheme ("ICS"). The ICS is intended to help private individuals and does not cover institutions and professional clients. Compensation under the ICS is limited to 90% of the amount lost, subject to a maximum of €20,000 to each investor."

Wouldn't quantum computing break all of the current encryption technology used to safeguard your bank and brokerage etc, so I assume this is just as much a risk to the standard finance community as it is to crypto?

Congrats to all the china bulls, looks like you are finally getting a bit of positive momentum after a long period of pain. China has always been in the too hard pile for me, I don't live there, don't use any the services of any of the big name stocks (alibaba, JD, PDD), and don't know much about the leaders of these companies which makes it too hard for me to be comfortable owning them, and that lack of comfort would likely cause me to lose faith if they started dropping again. I just stick to what I know well which are mainly large US and Western European companies. Perhaps I will miss out on some of the big gains you guys will receive should China go into a new boom period but that's ok.

I'd say Buffett is more than happy to sit it out in t-bills for the rest of his life (possibly another 5 years). One of his greatest strengths was never being compelled to do something. If the market crashes and some good deals come available then I'm sure he'll be delighted to snap them up, and if it doesn't he'll just receive his 4 or 5% (or lower) in t-bills.

Just taking a quick look at Rentokil's financials, earnings and cashflow history and growth looks good. My main concerns look to be around low returns on capital and seems to be a lot of dilution over last couple of years. Perhaps these two are related.

I'd say this also depends on the person's investment approach also. For people who have a large number of positions or lots of portfolio turnover then there may be some relationship between hours allocated to investing and overall results (although can't say for sure). For people like me who have about 5-10 positions, hold for 10 years+, and might get a big insight every once in a while it's not something you can brute force. In fact there's a case to be made that my results might get worse if I allocated all my day to investing, I might get compelled to do something when doing nothing is more likely a better approach. I generally always have investing in my head, but there isn't any rigid structure I follow. I'll read the newspaper, read books, listen to podcasts, watch some youtube videos. Something interesting might come along once in a while that would cause me to read the annual report or listen to earnings calls.

That's great thanks for the additional info. Nice work avoiding the bear markets!

Dividend are generally a quite tax inefficient way to return cash to shareholders seeing as they are taxed at the recipients income tax rate which is usually much higher than the capital gains rate. In pretty much all cases the investor would be better off selling 2% of the stock once a year, rather than receiving a 2% dividend. The dividend is paid out of the business which reduces the value of the stock but many people (even quite sophisticated investors) seem to think a dividend is this magical 'extra' thing created out of nothing.

Yes I'm also curious about this. For example let's say in Jan 1st of the new year you have a portfolio worth $2m, do you just sell $100,000 worth of investments and then use that to cover your expenses for the year, or are you constantly selling off small chunks throughout the year? Also are you selling off a proportional amount of each position, for example if you have 10 positions, do you sell a bit of each or subjectively decided on a specific stock to sell for covering your expenses? Probably lots of tax implications to consider as well. Curious as to how you approach this?

Hard to say whether my returns would be better or worse if I quit my full-time job. I recently turned 40, have a decent paying job as a software consultant, and have built up a nice portfolio through reasonable savings effort and good stock market returns. My main interest is researching stocks and managing my portfolio and I almost see my day job as as hobby to support my 'real' job of investing. I've optimised my career in a way that supports this, fully remote job, not too stressful, individual contributor (no interest in the hassle that comes from management). My goal was to optimise for the 'highest salary I could get for the least amount of effort' and I've mostly succeeded in that so far. So even though I have a standard 9-5 job, it really only ends up being about 3 hours of actual work a day, the rest of which I can allocate to going for walks, thinking, researching companies etc. I don't have a very active investment strategy, I buy infrequently and generally hold for the long term (10 years plus ideally). Portfolio is not quite at the level that would enable me to quit full employment yet, would likely need at least another double (so about 5 years at my current compound rate). I also have a wife and two young kids so it's nice to have the stable income arriving every month. I could potentially make more emotional decisions if investing was my sole income so for now I'm not in a rush to pull the plug on the job.

I would be careful not to rule out Tesla. Waymo looks like it's ahead on technology at the moment due to the fact that they run very expensive cars with all kinds of sensors in a few geofenced areas with good weather and somewhat predictable driving conditions. Tesla are taking a more generalised approach with the eventual aim of being able to drop a car anywhere, without any prior knowledge or programming of the area, and have it able to drive itself successfully. This is a lot slower to solve initially but could potentially be the better strategy. Will be interesting to see how it plays out. Funny thing is that I have about a 10% position in Alphabet and around the same in Tesla so will be satisfied if either pull it off. There was a good recent podcast that Patrick O'Shaughnessy had with Gavin Baker that goes into this in a lot more detail. https://podcasts.apple.com/us/podcast/gavin-baker-ai-semiconductors-and-the-robotic-frontier/id1154105909?i=1000666758592

My net worth currently has about 13% allocation to crypto (10% btc, 3% Eth). Bought and held for over 4 years so have about a 6x on my btc and 10 or 11X on my eth purchase. I always felt that I got the thesis on bitcoin (Store of value, digital gold etc) a lot more than ETH. With that in mind I am considering gradually selling out of my ETH position, because essentially I don't fully understand it and I don't really keep track of the latest goings on in that space. There are also other rival platforms to eth like solana etc which serve slightly different purposes but again I don't fully keep on top of the latest updates. Curious how other posters feel about this and what their feelings are on ETH as a technology/investment?