73 Reds

I'm in the camp of not knowing (or really caring) about yearly numbers, mostly because most holdings are private going concerns. What does matter is increasingly higher distributions each year for purposes of investments, gifting, etc.. and this year was up nicely. Stock portfolio remains largely unchanged with 95+% comprised of BRK, MSFT, HD, AAPL, WMT and Fairfax - the thinking is if they're not broken why sell and pay taxes? A few small new holdings at year end just to make things more interesting.

Its not a new asset class. Its another (inferior, for my purposes) way of exchange. Google and Amazon make my point - they provide services and generate something called "profits". Gold ETFs track the price of gold. Over any duration in history, when has gold been a competitive investment? I'm not arguing that BTC won't be adopted by some, perhaps even many. My argument is with the price at any given time. It is a figment of a very small number of people's vivid imaginations until eventually reality takes hold.

That's just it - gold is fully "adapted" and has been a poor investment. Same with pretty much any commodity or for that matter any currency. I can use currencies and commodities while having no interest in investing in them. I'm not alone. People that do have an interest have been investing in these type things since their inception/discovery but to what end? At the beginning of my professional lifetime, much of the technology we use today could not even be imagined. Who says BTC might not be a blip in history 10 years from now?

Yet what percentage of folks would be no more inclined to buy BTC at $10k then they would at today's price? I do enjoy the banter here on this board but truly wonder how many minds will be changed at the end of the day. And if something even "better" should come along? Then what?

LOL, I'll take the under.

They'll be poking fun at Buffett & Co. for missing out on a needle-moving investment. Sometimes the future is so visible far in advance.

Yeah, I guess all the BTC swing traders manage to buy low and sell high every time and never lose any money. It's that easy. Anyone can do it. Surprised there aren't more "How to trade BTC for guaranteed wealth" seminars and videos for purchase on line. Coming soon.

Problem is, I can't get past your assumptions because t-bills or the like make no sense since I would view them as wasted assets (your earlier post posited margining t-bills). In any event I can generate a better return on a non-marginable fixed income portfolio without margin so why bother? Granted, it requires some creativity and like you suggest, is not for everyone. But my main point is that margin is the worst form of debt. If you are going to borrow for the purpose of investment, there are far better alternatives. Why would you want to assume more risk with margin? Its like free money for the brokerage houses so what do you think that means for you?

There is always a happy median. I will free up cash if there is something I'm looking to buy and expect the price to be in range. But to sit in cash out of fear makes no sense because even cash does not guarantee a risk-free real rate of return and you can find other investments that for all practical purposes do.

Why mitigate for the sake of paying more to assume more risk? Some of what you refer to as "mitigation" is what most of us would do anyway. But diversification for one, is not the key to exceptional performance. Neither are strict entry points if the goal is to hold for the long term. For reasons already stated margin is the worst form of debt.

That's just it - margin is the one form of debt where you lose control. You and your account assets are subject to the weighing machine known as the stock market. You lose control because you are subject to price not value and as well all know, the two may be very divergent at any given time. Now, if you propose borrowing to invest vis-a-vis a HELOC, I have less of an issue with that. Your payments and payment schedule is known and won't vary. You can formulate a plan that won't need adjustment as the result of price fluctuations of your underlying account holdings. Another point, I don't understand is why one would incur margin debt against t-bills. You pay more margin interest than the yield generated by the t-bills. If you're going to use margin, don't you want to leverage assets that you believe generate a higher yield/return than the cost of the margin interest? In fact why own t-bills at all if you're going to use margin? Why not sell as much of the t-bills as necessary to acquire the investments you purchase with margin debt?

The distinction is foreclosure is a process that takes months, if not years and has nothing to do with depreciation of the underlying asset and is entirely within your control - you can sell the property, refinance the loan and/or come current with payments long before having the property taken from you. Margin calls happen instantly, are entirely outside of your control and require immediate or near immediate action, putting your account assets at risk and creating possible adverse tax consequences. The borrow costs and risks never go away. I view margin debt similar to the way I view credit card debt only there is more risk involved with margin debt. I'd never assume ROE will always be positive and sufficiently positive to exceed the costs and risks of margin. Margin debt simply makes whatever you buy that much more expensive.

Not sure I follow. There are no margin calls in real estate. The value of the property is irrelevant if you pay your mortgage, The only certainty with margin is you incur more debt. Unless there is a very specific reason why you want to pay interest for the "privilege" of taking on added risk, the concept of margin seems like a generally bad idea. Even so, why would anyone use margin to buy anything other than their very best ideas? And on that note, why own anything other than your very best ideas?

Management is one variable that all public companies have in common. Why do so few folks pay attention to management when evaluating a stock for investment? Looking back on a lifetime of investment, all my past mistakes were in buying stocks in which management was second rate.

Yup. Almost like creating something out of nothing, but "nothing" being brainpower.

Sounds like a ringing endorsement. Little did you know (or did you?) that when you created this site all anyone had to do is acquire the two namesakes and they would have done just fine simply playing spectator.

My own businesses. Always and often. An important ingredient is having a receptacle for reliable investment at returns well above cash so there is never any need to hold an outsized cash position or stretch for returns in public markets.

No universal number. Depends on where you live, lifestyle, obligations (personal, moral, legal) etc... At the end of the day when you take in far more than you need and you have all the time you want, you've reached the end-goal

If Buffett was so inclined, Berkshire could make a friendly bid for all but the top 25 or so most valuable companies in the S&P 500. Similarly, he could acquire any smaller company. Have to think that this could be part of the playbook for successor management.

You mean money is not going back to be free, LOL? Who'd have guessed?

I thought a head and shoulders top was a dandruff shampoo. Do these companies have flakes?

John, personality is a funny thing. More of a control person when it comes to investing, which is why most of my personal holdings are private equity, real estate and debt. Any public stocks must meet some very strict criteria and like you, only buy for long term results and don't care what happens regarding price next month or next year if the investment thesis holds.

That's just it - if you combine successful methodologies of many different types of investors, how well can you do? Wouldn't be about the money of course, but more about results. I know. of a few "clubs" that donate all profits to charities as voted upon by members just the same as the investments. No biggie, just a thought.

John, that is a nice thought, though if Sanjeev were in need of funds for COBF he'd surely have no trouble raising money from members. Got me to thinking about something completely different, an investment club (like the group Dealraker speaks about) consisting of COBF members and contributions. It would be interesting to measure how well such a "fund", as voted upon by members, would do over time.

There is no Federal inheritance tax though some states have an inheritance tax. The Estate tax (as opposed to inheritance tax) is paid by the Estate of the decedent prior to distribution. It is not a liability of the heirs. Transferring assets to a Non-revocable Trust during your lifetime removes those assets from your ownership - the Trust has its own taxpayer ID number and pays its own taxes. There can be tax benefits to the donor (creator of the Trust) particularly if beneficiaries are charitable organizations in addition to removing the assets from your taxable estate.