Spooky

JPM had an interesting Eye on the Market talking about Japanese / US markets: https://am.jpmorgan.com/ca/en/asset-management/institutional/insights/market-insights/eye-on-the-market/too-long-at-the-fair/

AI is the new thing for the market to get fixated on. Run away from fads. My personal view is that this will probably lead to an increase in productivity across many companies / industries and the best play is probably just a total world index since it is likely impossible to pick the winners and losers at this stage.

Bought some VIOO in my retirement account and a little nibble of BRK

I'm not saying that China can't succeed - their economy will likely continue to expand and society get wealthier (hopefully). My point is that this could still happen but the shareholders won't be the ones reaping the rewards.

Congrats John. I find myself in a similar position, I just kept consistently adding to my positions on weakness over the lifespan of this thread.

But what is the incentive to innovate / invest? What is the point of putting money into R&D to develop something new if all of the competition can just steal it / copy it right away? This is the purpose of patent protection so that companies know they have a period of time protected from competition to make a return on their R&D spending. This is where I think the US and other Western countries have the edge in innovation going forward.

Doesn't what you have written above conflict with the idea of shareholder returns? Brutal competition in every aspect is a nightmare for returns. Unless there is a barrier to entry / moat then firms can't expect to earn more than their cost of capital and growth produces no value. Layer on top of that no shareholder protections... doesn't seem like a good investing environment for shareholders.

Article in the FT with Bullard saying he is open to still raising rates as insurance against inflation. He is one of the more hawkish members and the top of his range is "just above 6%". If true, it still doesn't seem too bad to justify all this doom and gloom. It was pretty obvious back at certain points in 2022 that sentiment had diverged significantly from reality towards pessimism, reaching levels last seen during the financial crisis. Unless something else breaks here (big if) it looks like the bottom has already happened and the stock market has bounced back pretty well this year. There is still also a tonne of institutional money sitting on the sidelines. All that being said in a recent podcast Sam Zell said if he was at the Fed he would raise rates by another 3 or 4 percent....

Rest in peace Sam. Always enjoyed listening to him. The Capital Allocators podcast with him was great: http://sites.libsyn.com/94820/sam-zell-common-sense-and-uncommon-profits-capital-allocators-ep253

Very sad news. I just listened to one of his recent podcast appearances as well. Interesting guy.

Do you have a recommendation for small cap ETFs you like? Do you think the typical small cap ETF actually captures the returns of the small cap factor or are they forced to sell the position due to its size too early? I've always wondered why Buffett recommends buying the S&P 500 rather than something like VTI which includes small caps.

Just buy the VOO and set up automatic dividend reinvestment. Don't need to think about it. OR buy VOO in a tax sheltered account until maxed out and then allocate the rest to BRK in a taxable account.

Charlie keeps mentioning he would prefer if American oil companies stopped pumping oil entirely since hydrocarbons have other important uses and there is a limited supply. He mentioned this again at the AGM. I can't help but feel like this is part of the thesis that people are overlooking since it appears that there is still significant oil reserves under the Permian that are currently not easily accessible with current drilling technologies.

https://www.ft.com/content/6289bb84-01dd-4260-8b70-c9c455a159e7 Any Berkshire sleuths figure out what Buffett has been selling?

I made this since I found the juxtaposition of the two events Saturday fascinating. Love how low key and humble these two remain. All hail king Charlie!

Thanks!

Anyone have a non-paywalled link to the op ed?

Agree. Looking at the pie chart made me realize I had a lot of 1% or less positions that didn't make any sense. I decided to consolidate / simplify even more. All you need are 6-8 well selected stocks to have the benefit of diversification.

The new nifty fifty...

This is interesting and similar to me - I want to build my net worth in order to have total freedom. I'm also trying to get there with the highest probability of success possible (it's a trade off between speed vs certainty). Framing my decisions through this long term goal has been helpful. Instead of focusing on beating the market I have set a goal to compound my wealth at 10% per year. If I can do this over a long period of time then I will be very wealthy. Not having to worry about relative performance to the S&P over a short term period is also extremely advantageous.

Thanks KC, I've read these already, excellent content.

Thanks Thowed, I'll look into those materials. Another investor I've been meaning to do more research on is Tom Russo from Gardner Russo & Quinn. His performance has been exceptional and he generally has extremely long holding periods in companies like Heineken and Nestle: https://www.ivey.uwo.ca/bengrahaminvesting/resources/interviews-notes/thomas-russo/

100% agree! BRK is my second biggest position and is going to be in the 60% of my portfolio dedicated to the steady eddies. Wish I could find a BRK earlier in its life cycle.

This is where I'm trying to get to although I don't know what I will do with all my spare time :). Been thinking of taking 40% of my portfolio and allocating it to very long term Phil Fisher type growth investments and then just sitting on my ass(ets). The only problem is how do I identify these businesses that will stand the test of time.

@dealraker Great insights as always. What were the characteristics that you saw in Pepsi to be confident holding for the long term? What is your process for finding / evaluating companies to invest in generally?