Milu

Probably true on average and depends a lot on how long a timeframe you are judging over. Over 10 years, large business tend to continue dominance, over 20 it's less clear, over 30 then it's evident. And the companies can continue to stay large, not like the just dwindle to nothing, it's often that the new batch of 'large' companies, tend to just be much larger. For example in 20 years time it may be that the current big stock of today continue to grow and are large in absolute terms, but some new batch of companies, hypothetically an AI 7 of Open AI, Anthropic, and 5 new companies, are the new leaders in terms of size. Of today's batch maybe 3 or 4 dwindle, but perhaps Alphabet grows 10x over next 20 years, by actively removing that from your 'no mag 7 index' you have missed out on this. How about Broadcom, that is currently the 7th largest firm in the S&P right now, should that be removed, or Tesla which currently isn't in the top 7. Again you are now just actively managing your own personal index which I think is mostly a waste of time, and likely to not yield better results than just holding the index as it is.

I think eliminating exposure to the largest most profitable businesses the world has ever seen is most likely a losing bet over the next 5-10 years. If you are going to index just index, trying to be smart and remove certain names is no different to active management so just pick one or the other.

Good man for posting, a lot of people tend to ‘forget’ to post the bad years when it comes to these types of threads. While it’s hard to evaluate the success or failure of an investment strategy based on one year’s performance if you zoom out over the 5 years it looks to be a solid 14% cagr. my returns this decade have been 2020 - 53% 2021 - 22% 2022 - (33%) 2023 - 47% 2024 - 47% 2025 - 4% CAGR - 18.8%

The 2020’s have had plenty of extreme returns for me, so this year was a rather tame 5%.

I like to think I am a reasonably concentrated investor with my 8-10 positions, but just 2 is a whole new level. I always get curious to learn more when I see interesting edge cases like yours. Is your investment portfolio a substantial portion of your net worth? How long have you been investing and have you typically held just a couple of stocks?

Yes, and the other issue is that by outsourcing the investment decision to other forum members like Viking or some of the supposed 'gurus' Klarman, Ackman etc is that by basing your buy decision on their analysis, you are now somewhat reliant on them updating you on when they change their mind and sell the position. Hypothetical scenario, let's say Viking for whatever reason decides next year to sell Fairfax, will the people who followed him in now decide to just follow him out. Or maybe he just stops posting on the board for whatever reason, and fairfax goes through a rough patch, when you relied on another person's analysis you may be needing reassurance during the tough times, and if there's no posts to give you that, you may end up rudderless. Like Parsad mentions here, I do my own research, form my own conclusion and never rely on another person's work to get me there. I'm not an island though, forums, 13f's, are good idea generation material, or if I found the idea myself, they can be good sources to validate my own research, but it's risky in my opinion to offload the analysis to a third party no mater how smart, or how great a track record that person has.

It's a good skill to have alright, I've just never been able to do this, no matter how convincing and knowledgeable the person who pitched the idea is. A limitation on my part no doubt.

Viking could be the world's foremost expert on Fairfax, and some other poster could be the same for some other stock. Doesn't mean that following their lead is the best decision for every other investor on the board. You could be the world's greatest analyst on JP Morgan, but if I don't personally like to invest in banking stocks then I should stick to my personal approach. Many ways to skin a cat as they say.

For me, I don't feel I have any particular edge in evaluating the moat of an insurance/reinsurance company, nor am I particularly passionate about the space. I mostly just invest in companies I use myself or have a keep interest in learning about, probably not typical but it works well for me. That's great that Fairfax has compounded so well but as you know past performance is no guarantee and also while I can borrow the idea from some of the smart investors on the forum one thing that can't be borrowed is their conviction. Let's say I buy and then Fairfax experiences some 30-40% drawdown, I wouldn't likely have to gut belief to hold as the person who has fully bought into the vision and done the research.

I think it’s better if your friends and family have no idea about your net worth. Only person who knows our net worth is my wife and she doesn’t even have much interest unless I tell her. All my friends know I’m into investing but I’d say they have no clue what my net worth is, nor do I particularly care what theirs is. Most people in Ireland don’t care about investing other than buying a house. My younger brother and a former coworker are the only real life people that I can have proper conversations about investing with, most others just have no interest or knowledge, hence why I founds this forum as an outlet to have these discussions.

15% is not too bad, for me it’s 33% so I’d have to be pretty confident in the predictive capabilities of any strategy based on swapping in and out gold and bitcoin. I don’t think people intentionally stay in an underperforming name to avoid taxes, the underperformance is only evident in retrospect, but any investment decisions are made with the unknowable future. For example I hold bitcoin now with a large unrealised capital gain, I expect that it will continue to perform well for the next decade, but maybe when we get to 2035 and look back it ends up underperforming against gold, it’s not like I am deciding now not to sell my bitcoin to avoid taxes. I just can’t predict the future so selling now paying a large chunk of tax, and then putting it into a similar asset gold which now needs to outperform the capital gains drag I have created. Let’s say I make the switch and then in five years I get a feeling that bitcoin might start outperforming gold again, now I’ll sell my gold reduce my capital base a second time and then hope that bitcoin outperformance outweighs the performance of gold plus the tax drag I had realised. Probably just holding one of the assets bitcoin or gold for the full period would probably outweigh and strategic trading between the two, at least based on my tax rate, since yours is lower perhaps it might make more sense, but not fully convinced.

Makes sense. Not sure where you live but do you have to pay capital gains on any sales of bitcoin which you would roll into gold, and vice versa if you rolled back, if so that would be a major drag on things.

Interesting, I haven’t heard of many bitcoiners intending to roll bitcoin back into gold. Typically once a goldbug becomes a bitcoin convert they don’t tend to go back. I’m a fan of both and held both at one stage but eventually just decided that bitcoin had the slightly better properties in terms of a store of value. Although I have noticed a lot more talk in the bitcoin community about gold as the recent rally and outperformance has likely caused a lot of people to second guess things.

No major changes for me, only activity was buy of chipotle and sale of lululemon (used last week’s bump to get out at $220 and essentially break even on the trade). Decided retail is not for me, I almost bought some Nike earlier this year too but thankfully talked myself out of it. Tesla 17% Meta 17% Google 15% Bitcoin 14% LVMH 6% Amazon 6% Nintendo 5% Dominos 3% Chipotle 3% Ethereum 2% Cash 12%

I think gold has beaten the S&P 500 over the last 10 years, 20 years, and 25 year period. Goes to show that a lot of the great returns we have seen in assets like stocks and real estate are mostly illusions, just nominal growth in a rapidly devaluing fiat currency. Add in capital gains taxes on any sales and people are possibly even behind in real terms over these timeframes.

I’m quite bullish on Uber too, haven’t yet taken a position but getting close to it. I think the autonomous vehicle transition will be a big enough pie that uber, waymo, and Tesla can all do well. I’m impressed whenever I listen to Dara Khosrowsahi speak.

Feels like some serious coping alright. The asset is quite institutionalised now so I think the days of massive short term price appreciation is behind us, also means that the 80% drawdowns are less likely too as you said. My mental model is that it will trend towards a more volatile version of gold, which suits me fine. I don't think its something that will 3x in a year or anything like that anymore, but could still do 20-30% CAGR on the way to 500k depending on how quickly it gets there.

Yes maybe, I'm not a physicist so can't speak with major authority on the topic, but I do know a lot of smart people seem to think it's a valid idea. I can somewhat understand why Musk would have a bias for space based data centres, but don't see what Sundar Pichai or Jensen Huang would be so positive on the approach. Wouldn't they rather go for the bottom of the ocean approach you outline if it is indeed cheaper and less complicated, I assume they are smart fellows who evaluate these type of things?

I wonder how much of these assessments are just people trying rationalise a normal market drawdown. Bitcoin has gone down numerous times over its history, a 30-40% drawdown should be expected regularly, I don't get why people are so interested in explaining a reason behind it. Selling calls or doing other options trades are part and parcel of a large liquid market so not sure what the issue is.

I seem to remember how starting a private rocket company was a terrible idea, and starting an EV company was also a dumb idea. The world is full of people, often well educated intelligent people with expertise in the specific area who loves nothing better than to expound on all the things that are impossible and how it will never work. Maybe this guy will be right, but if it's something SpaceX, Google, Nvidia are working on I'll put my faith in the smart leaders with demonstrated track record of success than this fellow. Here is the conclusion of the article. "I suppose this is just about possible if you really want to do it, but I think I've demonstrated above that it would firstly be extremely difficult to achieve, disproportionately costly in comparison with Earth-based datacenters, and offer mediocre performance at best." Seems like pretty limited thinking if he's comparing the cost structure of already established earth based data centres which have had many years of cost improvements and optimisations with a brand new approach that doesn't exist yet. Obviously a space based approach will be much more expensive initially but like all new technological approaches costs will improve over time.

This Berkshire/Buffett transition reminds me a lot of Manchester United once Alex Ferguson finished up in 2013. Ferguson was a once in a lifetime operator who took over a struggling club in 1986 and over the next 3 decades built up the best track record of success in football and premier league history. When he eventually retired in 2013 he handed it over to his self picked successor and a 'reliable pair of hands' who was going to be there for decades and continue the clubs storied culture. Unfortunately as almost always happens succession is an exceedingly difficult thing and no matter what beliefs are held by the visionary leader the real world dynamics of ego, ambition, doubt, shareholder dynamics can come to the surface in even the best businesses. During the 12 years since Ferguson retired Manchester United have cycled through 9 different managers on either a permanent or interim basis, with the longest being about 3 years. They have never won the league again after 13 victories during fergusons 26 year reign. Obviously this is just an analogy and who knows how berkshire will play out, but I would wonder how patient shareholders would be once the spiritual leader buffett is gone, perhaps the share price goes nowhere for a few years, perhaps Abel makes his first big investment and it doesn't work out as planned, knives start coming out angling for change. Buffett won't be there anymore to calm the nerves. Perhaps Abel then gets more gun shy, shareholders are now pushing for dividends to be paid out. Some more employee turnover occurs, AI starts to chip away at some of their big businesses. While I can't predict what will actually happen I can certainly predict the difficulty that lies ahead for the person who takes over from a once in a generation leader. It will be interesting to watch. I wish him luck.

Ha, same here. About 95% of people in the crypto community I can't stand. Yet I'm a massive advocate of Bitcoin and what it stands for.

All I see is a normal drawdown, quite mild actually so far. We may go down a bit further or we may hit all time high before end of the year. I hope that the nonsense around some predictable 4 year cycle can be put to rest over the next year or so too. I’ll continue to hold as I’ve done for 5.5 years so far, might even buy a little bit of mstr to use as a rough bitcoin proxy in my pension now that the nav premium is gone.

Sure but can’t companies do both, use cutting edge nvidia chips for the tasks that require them, for example training runs for the models, and then use older less cutting edge chips for less complicated tasks. Overall it seems that these hyperscalers are getting a lot longer out of their hardware than was previously thought and they are adjusting their accounting to reflect this. It’s not some co-ordinated ploy to juice earnings.