30 Year Portfolio

[ValueMaven]

For fun: Assuming no additions or sales ... what is your 30Yr portfolio hold.  2054 (!!)

More concentrated the better: 

1) Constellation Software

2) HEICO 

3) American Tower 

4) Moody's 

5) Berkshire 

[Sweet]

Not sure.

 

Amazon probably - over 50% of their revenue comes from the USA.  The run way remains large but execution could be challenging.

 

A home building, maybe NVR, people are going to need houses.

 

Biotech, I’d play it safe with an ETF.

 

A bank or two, not JPM, although everyone knows it’s the best right now I’d probably go for the recently beaten up Bank of America.

 

I’d also bet on an emerging market, probably India, again through some ETF.

[bargainman]

S&P or total stock market fund.

[Luke]

At todays valuations, for a 30 year period, id be relatively comfortable to put my money into these stocks at equal weights: 

 

1. Berkshire

2. Fairfax

3. Prosus/Tencent

4. Nintendo

5. LVMH

 

Not sure if you will beat the index with that because over 30 years many things can change but those would be my best long term horses

 

 

 

Edited January 13 by Luca

[DooDiligence]

5 minutes ago, Luca said:

At todays valuations, for a 30 year period, id be relatively comfortable to put my money into these stocks at equal weights: 

 

1. Berkshire

2. Fairfax

3. Prosus/Tencent

4. Nintendo

5. LVMH

 

Not sure if you will beat the index with that because over 30 years many things can change but those would be my best long term horses

 

 

 

 

If I were you, I'd upvote this post.

[Dinar]

3 hours ago, Luca said:

At todays valuations, for a 30 year period, id be relatively comfortable to put my money into these stocks at equal weights: 

 

1. Berkshire

2. Fairfax

3. Prosus/Tencent

4. Nintendo

5. LVMH

 

Not sure if you will beat the index with that because over 30 years many things can change but those would be my best long term horses

 

 

9

I agree with 2,4, and 5.  I would add the following:  JOE, L'Oreal, Safran & Airbus, Ashtead, MSGE(ticker) , NEN (ticker), Tel-Aviv stock exchange.  Also, Hermes which I do NOT own.  

Edited January 13 by Dinar

[ValueArb]

SpaceX

[Luke]

47 minutes ago, Dinar said:

I agree with 2,4, and 5.  I would add the following:  JOE, L'Oreal, Safran & Airbus, Ashtead, MSGE(ticker) , NEN (ticker), Tel-Aviv stock exchange.  Also, Hermes which I do NOT own.  

Thanks for sharing, i never bothered doing deep DD on JOE, is the general consensus of the board that this is still value with decent upside/downside relations? Agree also with the other businesses, all strong moats.

[Spekulatius]

Current valuations a actually should not matter that much over a 30 year period, it all about growth and longevity.

 

Personally, I think the right answer over such a period is to buy and index or something that is likely to renew itself over time. The reason why I think renewal is critical is because the future over such a long period like 30 years is unknowable. my concern with some time like Berkshire is that the leadership as we know it will be gone (even Abel is not going to hang around that long) and they also have the coffee can approach which could end up burdening Berkshire with a lot of deadwood, unless they start to dump some business or spin them off over time.

 

So my choice would be QQQ, or SPY or perhaps something like Investor AB or Exor which is designed as a Holdco and probably will refresh their holdings over time.

 

I think some structural advantaged business like Railroads could work too, because I don’t think they will be disrupted in the next 30 years.

 

I think the nifty fifty have

[John Hjorth]

1 hour ago, Spekulatius said:

Current valuations a actually should not matter that much over a 30 year period, it all about growth and longevity.

 

Personally, I think the right answer over such a period is to buy and index or something that is likely to renew itself over time. The reason why I think renewal is critical is because the future over such a long period like 30 years is unknowable. my concern with some time like Berkshire is that the leadership as we know it will be gone (even Abel is not going to hang around that long) and they also have the coffee can approach which could end up burdening Berkshire with a lot of deadwood, unless they start to dump some business or spin them off over time.

 

So my choice would be QQQ, or SPY or perhaps something like Investor AB or Exor which is designed as a Holdco and probably will refresh their holdings over time.

 

I think some structural advantaged business like Railroads could work too, because I don’t think they will be disrupted in the next 30 years.

 

I think the nifty fifty have

 

Thank you, @Spekulatius,

 

This is to me personally just such an awesome post of yours, - as already mentioned, in my personal opinion.

 

It basically isen't about names & tickers, but more about principles, basic criterias and considerations from which to specifically allocate capital to names, companies & groups, based on their respective modus operandis. And we should discuss exactly that in this topic in stead of, picking names or tickers with no reason or overall rationale mentioned to supporting it.

 

For Investor AB [, Sweden] :

 

English :

 

 

Swedish :

 

 

 

The Wallenberg family isen't wealthy as such in private, because pretty much all fortunes built over time has gradually been given to foundations, while the mantra for the family is - it's obsessed with it :

 

"To move from the old to what is about to come is the only tradition worth keeping."

Edited January 13 by John Hjorth

[Viking]

2 hours ago, Spekulatius said:

Current valuations a actually should not matter that much over a 30 year period, it all about growth and longevity.

 

Personally, I think the right answer over such a period is to buy and index or something that is likely to renew itself over time. The reason why I think renewal is critical is because the future over such a long period like 30 years is unknowable. my concern with some time like Berkshire is that the leadership as we know it will be gone (even Abel is not going to hang around that long) and they also have the coffee can approach which could end up burdening Berkshire with a lot of deadwood, unless they start to dump some business or spin them off over time.

 

So my choice would be QQQ, or SPY or perhaps something like Investor AB or Exor which is designed as a Holdco and probably will refresh their holdings over time.

 

I think some structural advantaged business like Railroads could work too, because I don’t think they will be disrupted in the next 30 years.

 

I think the nifty fifty have

Insightful post. I agree. All three of my kids (early 20’s) each have TFSA, FHSA (both tax free) and investment accounts. Their big advantage today over all other investors is time. Should they pick stocks? No. Index funds. Right now i am thinking 1/3 each in XIC.TO, VO and VOO. Set and forget (and easy) way to get rich. 
 

i now have 30% of my total investments in index funds (same three i listed above). That is a first for me. Over time, my plan is to have weightings of 2/3 index funds and 1/3 active management (i pick). At least that is the plan today. 

—————

I will point out that today i do have most of their investments in Fairfax (we started down this path 18 months ago). But new money will go to index funds (we have started). And as Fairfax approaches fair value (not there yet) i will shift them to 100% index funds. 
—————

I also tell them to pray for a long bear market in stocks - to hope their portfolio goes lower. Buy low, hopefully for years. They want a bull market in stocks when they are much older. 

[Luke]

11 minutes ago, Viking said:

Insightful post. I agree. All three of my kids (early 20’s) each have TFSA, FHSA (both tax free) and investment accounts. Their big advantage today over all other investors is time. Should they pick stocks? No. Index funds. Right now i am thinking 1/3 each in XIC.TO, VO and VOO. Set and forget (and easy) way to get rich. 
 

i now have 30% of my total investments in index funds (same three i listed above). That is a first for me. Over time, my plan is to have weightings of 2/3 index funds and 1/3 active management (i pick). At least that is the plan today. 

—————

I will point out that today i do have most of their investments in Fairfax (we started down this path 18 months ago). But new money will go to index funds (we have started). And as Fairfax approaches fair value (not there yet) i will shift them to 100% index funds. 
—————

I also tell them to pray for a long bear market in stocks - to hope their portfolio goes lower. Buy low, hopefully for years. They want a bull market in stocks when they are much older. 

Any concerns that they throw the money out the drain when they turn 18/21?  Id probably not make any account for kids but allocate my money if it makes sense (inviting them on trips, paying expensive uni etc). When I was 18 I certainly wasn't old enough to get 6 figures that I can spend on anything. If id have an account for kids id also use index funds probably, enough energy to take care of one portfolio. 

[Luke]

1 hour ago, John Hjorth said:

 

Thank you, @Spekulatius,

 

This is to me personally just such an awesome post of yours, - as already mentioned, in my personal opinion.

 

It basically isen't about names & tickers, but more about principles, basic criterias and considerations from which to specifically allocate capital to names, companies & groups, based on their respective modus operandis. And we should discuss exactly that in this topic in stead of, picking names or tickers with no reason or overall rationale mentioned to supporting it.

 

For Investor AB [, Sweden] :

 

English :

 

 

Swedish :

 

 

 

The Wallenberg family isen't wealthy as such in private, because pretty much all fortunes built over time has gradually been given to foundations, while the mantra for the family is - it's obsessed with it :

 

"To move from the old to what is about to come is the only tradition worth keeping."

Thanks for sharing John, it surely is a bedrock of a company. Id also put it on my 30 year list, including Exor. 

[SafetyinNumbers]

I think FFH and ELF would be diversified enough and provide decent returns.

 

FFH has exposure to fixed income and inefficient markets. 

ELF is a good substitute for index funds as on a look through basis it owns VOO and diversified global GARP stocks. 

 

Both offer cheap leverage for structurally higher returns. 

 

 

[John Hjorth]

7 hours ago, Luca said:

Thanks for sharing John, it surely is a bedrock of a company. Id also put it on my 30 year list, including Exor. 

 

Thank you, @Luca,

 

It was actually not so much - here, in this context - about Investor AB as such, but more about the overall mindset at Investor for how to choose [pick], invest in and run businesses. As shown by me above, the particular mindset was first crystalized  in writing in 1946 at Investor AB, and still saturates everything there.

 

Another way to phrase it conceptually is the following :

 

"Stagnation is not stagnation - stagnation is regression"

"'Good' is the worst enemy of the great company"

 

Long term it is more about quality and growth than price [paid], @Spekulatius wrote in a post upstream. I don't think anyone here on CoBF would disagree with that.

 

It is about a business simply breaking the 'usual business life cycle' to stay alive and also prosper and staying relevant going forward, no matter its age, instead of it to die. On the rim, it's about staying relevant due to innovation and development by investments in the future. Such businesses actually aren't few, nor seldom. They're just about everywhere. The World is actually stuffed with them. We just need to find them and pick them, carefully, to our best [not easy!]  avoiding loosers and laggards.

 

Mr. Buffett in his 50 years anniversary Berkshire letter from 2014 calls such a good company 'sprawling', and calls Berkshire sprawling, too, in that letter.

 

Personally, It think we have quite some fairly young CoBF members by now who have the potential to take this really far for themselves, if they early on get it right and don't become subscription paying members of the foolish crowd by avoiding and stearing clear of serious and material mistakes early on, ref. the basics of compounding.

Edited January 14 by John Hjorth

[nwoodman]

13 hours ago, John Hjorth said:

 

Thank you, @Spekulatius,

 

This is to me personally just such an awesome post of yours, - as already mentioned, in my personal opinion.

 

It basically isen't about names & tickers, but more about principles, basic criterias and considerations from which to specifically allocate capital to names, companies & groups, based on their respective modus operandis. And we should discuss exactly that in this topic in stead of, picking names or tickers with no reason or overall rationale mentioned to supporting it.

 

For Investor AB [, Sweden] :

 

English :

 

 

Swedish :

 

 

 

The Wallenberg family isen't wealthy as such in private, because pretty much all fortunes built over time has gradually been given to foundations, while the mantra for the family is - it's obsessed with it :

 

"To move from the old to what is about to come is the only tradition worth keeping."

+1. Great post.  On holidays at the moment so you have given me some new ideas to think about.

[nwoodman]

11 hours ago, Viking said:

Insightful post. I agree. All three of my kids (early 20’s) each have TFSA, FHSA (both tax free) and investment accounts. Their big advantage today over all other investors is time. Should they pick stocks? No. Index funds. Right now i am thinking 1/3 each in XIC.TO, VO and VOO. Set and forget (and easy) way to get rich. 
 

i now have 30% of my total investments in index funds (same three i listed above). That is a first for me. Over time, my plan is to have weightings of 2/3 index funds and 1/3 active management (i pick). At least that is the plan today. 

—————

I will point out that today i do have most of their investments in Fairfax (we started down this path 18 months ago). But new money will go to index funds (we have started). And as Fairfax approaches fair value (not there yet) i will shift them to 100% index funds. 
—————

I also tell them to pray for a long bear market in stocks - to hope their portfolio goes lower. Buy low, hopefully for years. They want a bull market in stocks when they are much older. 

You sir, are a true enigma, in the most intellectually respectful sense. I would have thought, given your considerable skills,  you would give alpha a crack for a bit longer.  Here’s hoping that Fairfax outperforms but never quite reaches your notion of “fair value”  .  

[Viking]

6 hours ago, nwoodman said:

You sir, are a true enigma, in the most intellectually respectful sense. I would have thought, given your considerable skills,  you would give alpha a crack for a bit longer.  Here’s hoping that Fairfax outperforms but never quite reaches your notion of “fair value”  .  

@nwoodman , here is a little more information:

1.) probably my biggest strength over the years has been avoiding bear markets.
2.) my biggest weakness the past 15 years is being too cautious coming out of bear markets (not simply being fully invested).

3.) my outperformance versus the market averages (thank you Fairfax, with assists from oil and extreme volatility) the past 3 years has been large - moving a chunk into index funds locks in that significant outperformance. My guess is stocks will rip again at some point in the next couple of years and what you own will matter much less than simply being fully invested. 

4.) estate planning is becoming more important. If i am ever ‘hit by a bus’ i want my wife and kids to know what to do - and that is mostly index funds.
 

So i decided i needed to migrate a significant chunk of my portfolio to index funds - so i can over time fine tune which index funds and weightings. My family is also learning at the same time (i have my wife/kids read about them and actually buy them in the accounts so they get familiar with the mechanics) which is super important (learning financial concepts in small incremental steps is key). 
 

My guess is i will flex how much of my portfolio i actively manage. Today, other than Fairfax, i do not have many high conviction ideas. But that might change. My plan right now is to over time get 2/3 of my portfolio on autopilot with index funds.
 

My view is index funds offer reasonable (XIC.TO and VO) valuation today. XIC.TO is up about 14% since Feb 2020. That is terrible performance. If you include inflation, investors real returns are likely flat. VO is up 24% since Feb 2020 - real return has not been great. VOO is up about 42% since Feb 2020. And i am hoping all my index funds drop in value and i am able build out my index holdings at lower prices (which of course just means future returns will be higher).

Edited January 14 by Viking

[Viking]

19 hours ago, Luca said:

Any concerns that they throw the money out the drain when they turn 18/21?  Id probably not make any account for kids but allocate my money if it makes sense (inviting them on trips, paying expensive uni etc). When I was 18 I certainly wasn't old enough to get 6 figures that I can spend on anything. If id have an account for kids id also use index funds probably, enough energy to take care of one portfolio. 

@Luca before we did anything with the kids we talked to them first and got an agreement - any money they get from us is permanent savings. Not for spending - vehicles, vacations, wedding etc. The one exception might be a house.

 

Yes, there is a risk that something could go wrong. But i am not worried (i think i know my kids and their attitude about financial literacy and money habits). As a family, we have been talking about financial topics their whole life (I ran a financial literacy club at their high school).

 

Since we joined the real world (opened their TFSA’s about 18 months ago) the benefits far exceed anything i imagined. The kids are learning in small, slow increments. They are now able to help each other (setting up accounts, how the accounts work etc). Most importantly, they are starting to understand the power of compounding. And i am able to mentor them.
 

Seeing how well everything has been going, we made all three of our kids an offer. After they graduate from university and get their first job we will match (100%) whatever they are able to save in their first year of working. No limit. The goal here is to help in-still the habits of thrift, live below your means and pay yourself first. 
 

My oldest graduated from university in 2023. She landed her first ‘big girl’ job. The day after she signed her offer letter she came to me with her savings plan and financial goals for the next year (on her own… not me badgering her). Her plan is to save about $25,000 in her first year. If she can do this, she will have $50,000 (in addition to TFSA and FHSA). To do this she is living at home (i called her a room mate and my wife almost killed me). We rent a big house (4 bedroom, 2,300sq ft with two living levels) so it is not a problem for my wife and me. 
 

There is also an estate planning / wealth transfer aspect to all of this. My wife and i have more than we will ever need. Shifting a small amount of our estate into tax free accounts (or index funds that they never sell in taxable accounts) to our kids - when they are very young - in a thoughtful, methodical, educational, habit building way is looking like a really good idea right now. 
 

I think each of my 3 kids could have $200,000 each, largely socked away in tax free accounts, by the time they are 25 years old. That is crazy. At the same time, they will understand most of the important building blocks of personal finance. And they will hopefully be developing good financial habits. 
 

The early results have been very positive. But it is a work in progress.

Edited January 14 by Viking

[mattee2264]

I think you want blue chips stocks with legs that have survived a few cycles but do not look as though they are heading towards the decline phase of the industry life cycle. 

 

MICROSOFT seem the safest tech bet. They've navigated multiple technological transitions and they are trusted in enterprise software where companies prize reliability and familiarity. Interestingly of the top 10 companies during the dot com bubble Microsoft was the only one to replicate its former glories. History would suggest very few of the Mag 7 will be magnificent 30 years from now but Microsoft might be the exception. 

 

NIKE has always been the coolest sports brand and has seen off various competitors and the Nike swoosh is iconic. And with their money they can sponsor the best athletes and sports teams and run advertising campaigns and so on. 

 

EXXON is a blue chip oil company and should navigate the energy transition as well a anyone and return enough in dividends that you will do well even if fossil fuels eventually do get replaced. And you want some commodity exposure to balance the portfolio.

 

Berkshire I think will fail to do as well over the next 30 years. A lot of managers in their subsidiaries work hard even though they have enough money to retire because they love working for Warren and Charlie. Capital allocation is also something Warren and Charlie did superbly. Their successors are probably good as they've been handpicked. But the successors of the successors might not be as good. And a lot of their businesses are commodity businesses so dependent on good management and capital allocation to do well. Not the kind of businesses any fool could run. 

 

 

 

 

 

 

 

[Junior R]

19 hours ago, Viking said:

Insightful post. I agree. All three of my kids (early 20’s) each have TFSA, FHSA (both tax free) and investment accounts. Their big advantage today over all other investors is time. Should they pick stocks? No. Index funds. Right now i am thinking 1/3 each in XIC.TO, VO and VOO. Set and forget (and easy) way to get rich. 
 

i now have 30% of my total investments in index funds (same three i listed above). That is a first for me. Over time, my plan is to have weightings of 2/3 index funds and 1/3 active management (i pick). At least that is the plan today. 

—————

I will point out that today i do have most of their investments in Fairfax (we started down this path 18 months ago). But new money will go to index funds (we have started). And as Fairfax approaches fair value (not there yet) i will shift them to 100% index funds. 
—————

I also tell them to pray for a long bear market in stocks - to hope their portfolio goes lower. Buy low, hopefully for years. They want a bull market in stocks when they are much older. 

 

Would you reinvest the dividends from the ETFs or use that for day to day expenses?

[Viking]

1 hour ago, juniorr said:

 

Would you reinvest the dividends from the ETFs or use that for day to day expenses?

@juniorr i am not sure. I will figure that out over time.

[Spooky]

Over a 30 year period I agree that an index fund makes the most sense. Personally, I would probably pick something like the Vanguard All Equity Portfolio (VEQT.TO in Canada) since this gives you international diversification. VOO / SPY would be another solid choice.

 

If I needed to pick individual stocks I would pick BRK and CSU.TO. These are essentially diversified conglomerates with world class capital allocators at the top that have a tiny probability of going bankrupt. Over a 30 year time period, the capital allocation skill of management is probably the most important factor. The governance and incentive structures are also critically important to foster a long term view, ensure alignment between management and shareholders and ensure the company has the correct CEO. CSU's board is comprised of a large number of executives / insiders who have been at the company for a very long time and have a significant proportion of their wealth invested in the stock. Typically this has been the same at BRK but it may change in the future. Greg did purchase about $100M of stock with his own money though. 

 

My last thought is that BRK is like an index fund to a degree - Warren and Charlie have set their criteria for buying companies (see the Todd Combs interview from the Graham and Dodd breakfast). You can evaluate these criteria against the criteria set by Standard and Poor's. BRK also has some advantages versus the S&P (insurance float acting as leverage, no dividends so more tax efficient in taxable accounts). I also like the tilt towards energy given that in the future we are going to need more and more energy and they are becoming a big player in the space with good assets in the US with advantages against competitors (being able to retain capital for reinvestment rather than needing to have a high dividend payout ratio).

 

 

 

 

[Xerxes]

1) Constellation Software

2) HEICO 

3) American Tower 

4) Moody's 

5) Berkshire 

6) Old Dominion 

7) XPO

Copart

9) Brown & Brown

10) Dino Polska

 

just shamelessly stealing ideas from other sources. I am not expert on any of these.  

the last one came up in a few podcast. 

[Gmthebeau]

On 1/12/2024 at 5:38 PM, bargainman said:

S&P or total stock market fund.

 

Agree.  Over 30 years almost nobody beats an index fund.  The world changes to much to commit to something for 30 years.  Even Berkshire may become dicey once Buffett is gone.