Junior's portfolio / Coffee Can / Generational Wealth

[Sunrider]

Hi everyone

 

I'm about to begin investing on my son's behalf both a lump sum upfront and then contributions monthly or annually. He's still very young, so a good 18 - 20 years before he'll get to use the funds (or hopefully rolls them forward at that time). 

 

I wondered which companies/investments others here consider worthy of such a portfolio which I would ideally run at very, very low turnover. Starting valuation is a consideration though not a driving one, given lesser importance of this over long time frames (though I just struggle buying things at 30x revenue).

 

On my (perhaps eclectic) list currently: JOE, FRFHF, BRK, ALS.TO, TPL, BSM, ODFL, SODI, BUR.L.

 

Other suggestions for me to look at?

 

Thank you!

C.

 

 

[E. Nashton]

Not an endorsement but it's clear you like a certain type of investment...how bout CSU?

[schin]

5 hours ago, Sunrider said:

Hi everyone

 

I'm about to begin investing on my son's behalf both a lump sum upfront and then contributions monthly or annually. He's still very young, so a good 18 - 20 years before he'll get to use the funds (or hopefully rolls them forward at that time). 

 

I wondered which companies/investments others here consider worthy of such a portfolio which I would ideally run at very, very low turnover. Starting valuation is a consideration though not a driving one, given lesser importance of this over long time frames (though I just struggle buying things at 30x revenue).

 

On my (perhaps eclectic) list currently: JOE, FRFHF, BRK, ALS.TO, TPL, BSM, ODFL, SODI, BUR.L.

 

Other suggestions for me to look at?

 

Thank you!

C.

 

 

Is this a buy-and-hold for 18-20 years question? Based on your list above, do you think it'll outperform the S&P 500/ETF by a lot -- it's fairly diversified within? I'm thinking put into a S&P fund might be the easiest way. Are you going to rebalance or actively switch holding during this 20 year period?

[Blugolds11]

I would SP500 ETF, set and forget. No need for crystal ball, a lot can change over 20 years, look at the popular names from 20 years ago, majority have fallen from grace or are not even around any more, even those thought to be a slam dunk at the time for long term hold. Technology and industry changes and will continue to do so, business will look very very different 2 decades from now. We havent even really seen the impact of AI on business yet and there will be winners and losers.

 

For ease of "management" and not knowing what the future holds, I'd follow Warrens advice in this instance and use an ETF SP500. Also, not to be morbid, but if you start a portfolio for your son, that needs a lot of "tending" and heaven forbid, something happens to you along the way and you are no longer around to advise/manage and it sits there, thats a risk IMO. With SP500 ETF there is no risk, it can sit there for the next 50 years with no changes necessary or at least as long as it takes for your son to figure out how to manage it intelligently. 

 

Im in a similar boat, and these are the things I have considered. What can I guarantee will be around for as long as its needed, takes the least amount of hands on involvement in the event that Im no longer around. Also, with such a long horizon, you dont have to shoot for the moon on returns, with enough time (and he will have a good jump on the majority of people) you dont need mind blowing returns yearly to grow to a decent size. Play with a returns calculator, or read articles on retirement saving that show the difference between someone starting to save at say 25 fresh out of college without much money, but able to save even $100/mo vs someone who delays and then starts at 30 or so after kids and tries to play catch up, the differences are insane even if you assume the same yearly return, even if you drop the yearly return for the early starter by a couple points per year, still does well. Time in the market is a HUGE advantage and forgives a couple years of lousy returns. 

[Saluki]

i have a couple of those and if you are thinking 10 years out, I think FFXDF is cheap now and will get you a play on Asian growth (India) without the legal uncertainty of foreign ownership of stocks in China. 

 

If you think 20 years out, it's pretty hard to be sure about anything except something like Coca Cola, which may not grow much but will probably still be around 100 years from now. If I had to pick a 20 year one, i think SWBI will do okay. It's been around since the 1860s and has two things that have staying power: brand value and government contracts. 

[Sunrider]

21 hours ago, schin said:

Is this a buy-and-hold for 18-20 years question? Based on your list above, do you think it'll outperform the S&P 500/ETF by a lot -- it's fairly diversified within? I'm thinking put into a S&P fund might be the easiest way. Are you going to rebalance or actively switch holding during this 20 year period?

 

Not necessarily buy & hold for 18-20 years, though it would be nice if some of the stocks turn out to be worthy of that ...

[Sunrider]

6 hours ago, Saluki said:

i have a couple of those and if you are thinking 10 years out, I think FFXDF is cheap now and will get you a play on Asian growth (India) without the legal uncertainty of foreign ownership of stocks in China. 

 

If you think 20 years out, it's pretty hard to be sure about anything except something like Coca Cola, which may not grow much but will probably still be around 100 years from now. If I had to pick a 20 year one, i think SWBI will do okay. It's been around since the 1860s and has two things that have staying power: brand value and government contracts. 

 

yes, I guess the thing with Fairfax India which always put me off in the past was that it's hedge-fund comp masquerading as a public equity?

 

Re SWBI - so then one should put the defence primes on the list, too? Maybe LDO in Europe, if they ever get European defence consolidation right, that could have a long run-way, too.