30 Year Portfolio

[Sweet]

11 hours ago, Gmthebeau said:

 

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.

I’d argue in some respects you see that already.  Public stock holdings are 50% Apple, a company with no revenue growth and a PE of 30.  Great company sure.

[valueventures]

On 1/13/2024 at 3:19 PM, Luca said:

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.

I can't speak for others but based on the 2024 portfolio thread, JOE is still one of the most commonly held / heavily weighted positions. Kuppy recently commented on valuation on his Twitter (this is his largest position), reiterating that there is still a significant discount to NAV despite the run-up in price.

[rkbabang]

On 1/13/2024 at 3:24 PM, 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

 

I just read through this thread and this is the best post by far. So much will change in the next 30 years it’s almost unimaginable. 30 years ago almost no one had internet access for example. I had it in 1993 only because I was an engineering student and I had to go sit at a Unix work station in the computer lab in the EE department building to access it.  There was a short list of all the websites in the world.  Almost no one had cellphones yet. Calling “long distance” on a landline was still an expensive undertaking. Society will change, tech, the world.  There are almost no companies in existence right now which will not go through multiple management changes over the next 30 years.  There is no company I can think of that I’d buy if I absolutely couldn’t sell it for 3 decades. If I had to pick some, it would be utilities, pipelines, shipping, JOE and other real estate companies.  But I wouldn’t feel comfortable doing it. An index is the way to go for a long term passive portfolio.

[ICUMD]

My 30 yr portfolio is a high quality dividend portfolio generating increasing amounts of cash year over year. I add at lower PE and when dividend yields spike. 

 

I figure that sticking by this approach will generate a tremendous cash flow machine with the tincture of time.  

 

So far, my strategy is already, shall we say, paying dividends.

Edited January 21 by ICUMD

[dipod]

2 hours ago, ICUMD said:

My 30 yr portfolio is a high quality dividend portfolio generating increasing amounts of cash year over year. I add at lower PE and when dividend yields spike. 

 

I figure that sticking by this approach will generate a tremendous cash flow machine with the tincture of time.  

 

So far, my strategy is already, shall we say, paying dividends.

The more I learn about different investing styles, the more I see the importance and power of steady cashflow. If you have enough cashflow to cover your living expenses comfortably, then honestly the chase for the extra increase in price sometimes is not worth it. And if the dividends keep rising, your cashflow will only rise. 

The super sweet spot here is buying good cos with high dividend yields that are undervalued with reasonable prospects of capital appreciation. Jumping on the BNS train myself with more study. Thank you

[bargainman]

On 1/20/2024 at 7:09 AM, rkbabang said:

 

I just read through this thread and this is the best post by far. So much will change in the next 30 years it’s almost unimaginable. 30 years ago almost no one had internet access for example. I had it in 1993 only because I was an engineering student and I had to go sit at a Unix work station in the computer lab in the EE department building to access it.  There was a short list of all the websites in the world.  Almost no one had cellphones yet. Calling “long distance” on a landline was still an expensive undertaking. Society will change, tech, the world.  There are almost no companies in existence right now which will not go through multiple management changes over the next 30 years.  There is no company I can think of that I’d buy if I absolutely couldn’t sell it for 3 decades. If I had to pick some, it would be utilities, pipelines, shipping, JOE and other real estate companies.  But I wouldn’t feel comfortable doing it. An index is the way to go for a long term passive portfolio.

 

Have you watched Tony Seba's recent video on projections for the next 5 - 10 years?  Going to be wild..  It's worth watching some of Ray Kurzweil's presentations on exponential change as well.  Things start so slow but once they hit that curve... acceleration...

Edited January 28 by bargainman

[Spekulatius]

Human progress is hard to predict. If you followed tech progress and projections in the 70‘s‘s, you would have bet that most power is generated by nuclear power stations and that we would have a colony on Mars. Nobody predicted that we would have the equivalent of a supercomputer in our pocket that can connect to other superconductors in other people’s pockets anywhere in the world,

 

Nuclear power didn’t happen because people soured on it not because it wasn’t technically possible. The Mary colony didn’t happen because after the Moon interest interest waned and we did not make any progress on rocket engine tech chemical powered rocket engines are limited in terms of what can be accomplished.

 

The supercomputer ( smartphone ) became possible because Moore law kept compounding for 45 years and it is basically unthinkable what you can accomplish compounding technology at that rate for a long time. The rocket engine tech did not compound and is more or less still the same than it was in the late 60‘s. 
 

Investing is betting on human progress more or less and over t/e long term just as hard as predicting progress.

[John Hjorth]

48 minutes ago, bargainman said:

Have you watched Tony Seba's recent video on projections for the next 5 - 10 years? ...

 

Thank you, @bargainman,

 

YouTube - Tony Seba : The Great Transformation [Part 1] - Patterns of Change, Key Technologies & #PhaseChangeDisruption,

YouTube - Tony Seba : The Great Transformation [Part 2] - The #Disruption of #Transportation,

YouTube - Tony Seba : The Great Transformation [Part 3] - The #Disruption of #Energy,

Youtube - Tony Seba : The Great Transformation [Part 4] - The #Disruption of #Food & #Agriculture, &

YouTube - Tony Seba : The Great Transformation [Part 5] - Implications.

Edited January 28 by John Hjorth

[Castanza]

Equally weighted 10% 

- SCHD

- ITA (or something similar) 

- BRKb

- FFH

- MSFT

- NFLX

- CPRT

- WFG

- TPL

- GLD (or t-bills) 

 

[thowed]

Great thread - very thought-provoking.  After initial attempts to think of 'best' companies, I was persuaded by arguments here that an Index makes the most sense, given how much could change in 30 years.

 

The only thing I'd add (as a non-US person particularly) is WHICH index.  Not all are quite the same.

 

For instance, when I look at how the S&P500 has demolished Europe over the past 20 years, that is because of how Tech companies have made the S&P so much more dynamic and 'Darwinian' which is what you want.  Europe has one or two (e.g. ASML) and a couple of newer things like LVMH, but is more beholden to older, more static industries like Banks, Oil, Tobacco, Miners etc.

 

Arguably. over 30 years, the world could change so much that MSCI World might make sense - just in case - (or even one with some EM stuff in as I think MSCI World is just DM, ironically).

 

But it is also tempting to just copy Buffett with his old S&P500 suggestion - it is a pretty decent index with diversification in a dynamic country.  I mean, of course there could be a Civil War after the election with Trump doing ever more insane things, but if you worry about that sort of stuff TOO much, you'll never get anywhere!

 

 

 

 

 

 

[Luca]

8 minutes ago, thowed said:

Great thread - very thought-provoking.  After initial attempts to think of 'best' companies, I was persuaded by arguments here that an Index makes the most sense, given how much could change in 30 years.

 

The only thing I'd add (as a non-US person particularly) is WHICH index.  Not all are quite the same.

 

For instance, when I look at how the S&P500 has demolished Europe over the past 20 years, that is because of how Tech companies have made the S&P so much more dynamic and 'Darwinian' which is what you want.  Europe has one or two (e.g. ASML) and a couple of newer things like LVMH, but is more beholden to older, more static industries like Banks, Oil, Tobacco, Miners etc.

 

Arguably. over 30 years, the world could change so much that MSCI World might make sense - just in case - (or even one with some EM stuff in as I think MSCI World is just DM, ironically).

 

But it is also tempting to just copy Buffett with his old S&P500 suggestion - it is a pretty decent index with diversification in a dynamic country.  I mean, of course there could be a Civil War after the election with Trump doing ever more insane things, but if you worry about that sort of stuff TOO much, you'll never get anywhere!

Id ALWAYS chose a world ETF with the whole world sorted by market capitalization. Especially over longterm things can change and you still own 60%+ US in a global index anyways

[CassiusKing1]

Didn't Warren teach us this lesson at the 2021 AGM.

 

https://www.cnbc.com/2021/05/03/investing-lessons-from-warren-buffett-at-berkshire-hathaway-meeting.html

[MarioP]

From 1989 letter to shareholders

 

o     Below we list our common stock holdings having a value 
of over $100 million. A small portion of these investments belongs 
to subsidiaries of which Berkshire owns less than 100%.
			                        				          
                                                             12/31/89
  Shares    Company                                      Cost       Market
  ------    -------                                   ----------  ----------
                                                          (000s omitted)
 3,000,000  Capital Cities/ABC, Inc. ................ $  517,500  $1,692,375
23,350,000  The Coca-Cola Co. .......................  1,023,920   1,803,787
 2,400,000  Federal Home Loan Mortgage Corp. ........     71,729     161,100
 6,850,000  GEICO Corp. .............................     45,713   1,044,625
 1,727,765  The Washington Post Company .............      9,731     486,366

None of the top 20 largest cap. And 30 years later Geico is probably the best bet for future gain

[Xerxes]

I don’t know if this is a 30 year portfolio for Altimeter. But they tend to keep for long haul. 
 

Edited February 1 by Xerxes