Your largest equity buy in the last three months is...(long term buys mostly)

[SharperDingaan]

One concentrates to get rich, and diversifies to stay rich.

 

It's not a casino, and a live hero progressively takes $ off the table as the position performs; paying down debt/mortgages to lower monthly P & I obligations. ' Cause if you are suddenly underwater tomorrow ... it's a lot easier carry when you have lower monthly payments to make.

 

Swing trades are expected, and part of the process. These are companies that you know extremely well, how they make money, when, and their inherent risks; manic depressives will routinely offer you opportunities, that should be exploited. Systematically sell high, buy back low, and take the $ gains off the table.

 

Solid risk management, and temperament are core; most don't have the patience, can't tolerate being a 'market outsider', and lack the circle of competence/technical expertise. But after a while, move a good chunk of the portfolio out of your direct management; hubris is a fine line.

 

Also keep in mind that for most people,diversification doesn't mean an index fund; it's often 3-5 dividend payers, T-Bills, bonds, indexed pensions, and a fully paid off house. Minimised cash outflow obligations, offset against pension cash inflow, with dividends/interest covering any shortfall; T-Bills covering sudden liquidity demands. Diversification via different means.

 

SD     

 

      

Edited August 26 by SharperDingaan

[Onefoothurdles]

Largest purchase made to date was in an Indian company called Websolar, purchased 8 months ago and has nearly tripled in price since. Its a speculative play which I'm surprised has run up so quickly in such a short space of time and I'm rebalancing the rest of my portfolio in such a way to de-risk / diversify away from this single stock exposure. I would prefer to sell-down this position today, but given tax circumstances, I'll wait till after this becomes a >12 month holding. 

 

@SharperDingaan comments above are exactly how I am thinking about risk management and diversification overall. 

I'm patiently building a position in a couple of names such as FFH, BRK, FIH, Bollore and a number of smaller dividend yielding stocks. 

[73 Reds]

14 hours ago, SharperDingaan said:

One concentrates to get rich, and diversifies to stay rich.

 

It's not a casino, and a live hero progressively takes $ off the table as the position performs; paying down debt/mortgages to lower monthly P & I obligations. ' Cause if you are suddenly underwater tomorrow ... it's a lot easier carry when you have lower monthly payments to make.

 

Swing trades are expected, and part of the process. These are companies that you know extremely well, how they make money, when, and their inherent risks; manic depressives will routinely offer you opportunities, that should be exploited. Systematically sell high, buy back low, and take the $ gains off the table.

 

Solid risk management, and temperament are core; most don't have the patience, can't tolerate being a 'market outsider', and lack the circle of competence/technical expertise. But after a while, move a good chunk of the portfolio out of your direct management; hubris is a fine line.

 

Also keep in mind that for most people,diversification doesn't mean an index fund; it's often 3-5 dividend payers, T-Bills, bonds, indexed pensions, and a fully paid off house. Minimised cash outflow obligations, offset against pension cash inflow, with dividends/interest covering any shortfall; T-Bills covering sudden liquidity demands. Diversification via different means.

 

SD     

 

      

Seems like Berkshire alone meets your definition of diversified.  Why make things more difficult?  If you want, simply follow Buffett's advice to his surviving spouse - 90% Berkshire and 10% treasuries.  Anyone believe you won't "stay rich"?

[wondering]

Obsidian

[DooDiligence]

Edwards Lifesciences, Google and Hershey (in that order).

[gfp]

24 minutes ago, 73 Reds said:

Seems like Berkshire alone meets your definition of diversified.  Why make things more difficult?  If you want, simply follow Buffett's advice to his surviving spouse - 90% Berkshire and 10% treasuries.  Anyone believe you won't "stay rich"?

 

I don't disagree with your point, but Buffett's instructions to the surviving spouse is 90% S&P500 index fund and 10% cash equivalents / bills.  No Berkshire.

 

[73 Reds]

Just now, gfp said:

 

I don't disagree with your point, but Buffett's instructions to the surviving spouse is 90% S&P500 index fund and 10% cash equivalents / bills.  No Berkshire.

 

Technically that's true but ONLY because Buffett goes out of his way NOT to promote Berkshire.  Has he ever said, or even hinted that the SPY is a better investment than Berkshire?  Would a 93 year old man spend nearly every waking hour working on something he doesn't know will outperform an index?  Look no further than his last letter to shareholders for his true belief or just ask Bertie.

[rkbabang]

I have only initiated 1 new small position (SMLR) all the other buys have been adds to existing positions.  I have bought in this order:  MSTR, SMLR, MELI, GENGF, FRFHF, VAL, MSGE, CPNG, & FRPH.  All of which I consider long term holdings.

 

[dealraker]

15 hours ago, SharperDingaan said:

One concentrates to get rich, and diversifies to stay rich.

 

It's not a casino, and a live hero progressively takes $ off the table as the position performs; paying down debt/mortgages to lower monthly P & I obligations. ' Cause if you are suddenly underwater tomorrow ... it's a lot easier carry when you have lower monthly payments to make.

 

Swing trades are expected, and part of the process. These are companies that you know extremely well, how they make money, when, and their inherent risks; manic depressives will routinely offer you opportunities, that should be exploited. Systematically sell high, buy back low, and take the $ gains off the table.

 

Solid risk management, and temperament are core; most don't have the patience, can't tolerate being a 'market outsider', and lack the circle of competence/technical expertise. But after a while, move a good chunk of the portfolio out of your direct management; hubris is a fine line.

 

Also keep in mind that for most people,diversification doesn't mean an index fund; it's often 3-5 dividend payers, T-Bills, bonds, indexed pensions, and a fully paid off house. Minimised cash outflow obligations, offset against pension cash inflow, with dividends/interest covering any shortfall; T-Bills covering sudden liquidity demands. Diversification via different means.

 

SD     

 

      

Not a disrespectful or overly challenging post from me SharperDingaan, but one for thought.  I'd say most of my net worth today is because I did not "take $ off the table as the position performed."  A lengthy time period is involved which by definition will likely not be addressed in a forum such as this.  Thus these type end results or outcomes will be somewhat invisible.

 

Munger's comment about Ben Graham's holding GEICO for half his performance?  Where did we read that?  I never did, I just heard Munger state it.

Edited August 26 by dealraker
better wording

[John Hjorth]

50 minutes ago, 73 Reds said:

Technically that's true but ONLY because Buffett goes out of his way NOT to promote Berkshire.  Has he ever said, or even hinted that the SPY is a better investment than Berkshire?  Would a 93 year old man spend nearly every waking hour working on something he doesn't know will outperform an index?  Look no further than his last letter to shareholders for his true belief or just ask Bertie.

 

Thanks, @73 Reds, - great observation, - great post.

 

Berkshire Hathaway 2023 Letter, p. 7, top of page paragraph :

 

Quote

... With that focus, and with our present mix of businesses, Berkshire should do a bit better than the average American corporation and, more important, should also operate with materially less risk of permanent loss of capital. Anything beyond “slightly better,” though, is wishful thinking. This modest aspiration wasn’t the case when Bertie went all-in on Berkshire – but it is now. ...

 

Thank you for sharing it here.

Edited August 26 by John Hjorth

[73 Reds]

8 minutes ago, dealraker said:

Not a disrespectful or overly challenging post from me SharperDingaan, but one for thought.  I'd say most of my net worth today is because I did not "take $ off the table as the position performed."  A lengthy time period is involved which by definition will absolutely never be addressed in a forum such as this.  Thus these type end results or outcomes will always be invisible, not something possibly conceptual to our discussions.  

 

Munger's comment about Ben Graham's holding GEICO for half his performance?  Where did we read that?  I never did.  

@dealraker, I love your posts but you, yourself demonstrate why a lengthy time period should absolutely be addressed and considered in a forum such as this.  Isn't the objective here financial success?  

[John Hjorth]

7 minutes ago, 73 Reds said:

@dealraker, I love your posts but you, yourself demonstrate why a lengthy time period should absolutely be addressed and considered in a forum such as this.  Isn't the objective here financial success?  

 

I have for now more than a decade here on CoBF been thinking that the in general transactional nature of the described investment approach by a large part of the CoBF members posting here [many living in USA and Canada, perhaps UK can be added here], can be directly related to national tax regimes and systems, where realized gains and losses on finished and completed chains of transactions in tax deferred accounts aren't taxed, and nor are similar unrealized gains and losses on unfisnished chains of transactions].

[DooDiligence]

Most of my mistakes have been selling too soon.

 

vs

 

I’m just trying to catch a few swings in and out of businesses I wanna own.

[73 Reds]

18 minutes ago, John Hjorth said:

 

I have for now more than a decade here on CoBF been thinking that the in general transactional nature of the described investment approach by a large part of the CoBF members posting here [many living in USA and Canada, perhaps UK can be added here], can be directly related to national tax regimes and systems, where realized gains and losses on finished and completed chains of transactions in tax deferred accounts aren't taxed, and nor are similar unrealized gains and losses on unfisnished chains of transactions].

Yes, investment style has much to do with whether investments are held in taxable or tax-deferred accounts.  Though as Dealraker shows, his results would be exemplary in both.  Not to discourage discussion of trading opportunities at all, but many posters here, particularly younger folks could benefit from his example.  

Edited August 26 by 73 Reds
spelling

[aesophawk]

Largest equity buy this year for me has been London Dominos. I started a 4% position last year, now it is 9%. Other than that took GTX from 3% to 5%. I typically hold between 6-15 positions and try to find one or two things a year. 

[bennycx]

Verisign.. not much to say other than it is boring. Downside I think is limited. Upside most analysts don't see much but I am hoping for some surprise, e.g. price increase, more website registrations, potentially M&A etc..

[brobro777]

41 minutes ago, bennycx said:

Verisign.. not much to say other than it is boring. Downside I think is limited. Upside most analysts don't see much but I am hoping for some surprise, e.g. price increase, more website registrations, potentially M&A etc..

 

This may turn out to be a great idea - no real downside risk with constant buybacks and short term pop back to $200+ for whatever reason

 

thanks man

 

 

 

[Spooky]

On 8/25/2024 at 2:13 AM, sleepydragon said:

Does concentrating really make sense? I have been wondering, because if you concentrate it’s very hard to keep a stock for very long term. People change minds too often. So holding long term seems to be conflicting with building a concentrated portfolio.

 

I find that it is the opposite. I'm only comfortable concentrating in positions I'm willing to hold for the long term. I have never sold a share of BRK or CSU but have added to them over the years.

[Spooky]

For me this year I have been buying decent amounts of Fairfax, JOE and Enbridge.  Also added to some BRK.B at the start of the year. Sold BN, BAC and PARA.

[Blugolds]

7 minutes ago, Spooky said:

 

I find that it is the opposite. I'm only comfortable concentrating in positions I'm willing to hold for the long term. I have never sold a share of BRK or CSU but have added to them over the years.

Same....BRK, CSU, COST, FRFHF all positions that I am comfortable holding if the market closed for the next 5-10 yrs. Percentage of port reflects that as well. As stated by other posters above, tax consequences have to be considered. 

 

I do take smaller positions in "2nd tier names" that I monitor more frequently but again, percentage of port reflects that. 

 

Some of my smaller positions that I have held have also turned into much larger percentages and in hindsight I should have swung harder! 

 

These may not yield that absolute best returns possible or trounce the market but I sleep very well at night. In the event of market turbulence I view it as opportunity to add to the core concentrations and pick up other stuff on the watch list. IM not great at really knowing in great detail dozens of businesses so for me, the core concentrations are just easier to manage/understand etc. My circle of competence is probably lower than many others here, but the concentrated long term holds I know very well.  

[Castanza]

On 8/24/2024 at 3:24 PM, dealraker said:

Castanza, deceased parents thus inherited Berk in my teens.  Dad's broker had several in my dad's family in the stock and basically all his clients had Berk by the late 1970's.  First 17 yrs. or so for me in a trust fund, it began as a low 4 digit figure that at the time I figured if I could sell it would buy me a Jeep CJ5 which I greatly desired.

 

39% in Berk, almost 42% AJG.  Several 1.5 to 2%: same ole boring story - Erie, Lowe's, Norfolk, Fairfax, Coke, Pepsi, Mondelez, Brown and Brown, Markel.  Mondelez comes from Cadbury buy in 2000 and Erie shortly thereafter, the newest two.  Brown 1994, Fairfax began mid 1990's, Markel 1987 or 88...can't remember.

 

1% position would be very large for me to buy.  But these buys are important, they are meaningful when less than 1%, meaningful to me in every way.  A taxable story, that's my issue.  None of the above are where I'd be willing to sell and pay tax.  Coke, Pepsi, Berk...all 1975 basis while Norfolk (inherited 1/27th of grandmother's) is 1976 basis.

 

For nearly 3 decades I know for certain (my brokerage records) that this portfolio has advanced about 15% a year.  That's basically an AJG assisted thing of course.

 

I do have, not included in the above, a small IRA where I put in $30k, all before 1994.  I have shared that here a few times.  It continues to do well with almost no trading...ever.  Below since 2011 and never a tech stock or any stock for that matter much followed or discussed on COBF: 

 

Year	Return	Beginning Market Value	Deposits Minus Withdrawals	Investment Results	Ending Market Value
Since Performance Inception	+15.21%	$126,513.16	+$118,684.57	+$1,334,075.73	$1,579,273.46
YTD	+12.61%	$1,402,465.52	$0.00	+$176,807.94	$1,579,273.46
2023	+16.90%	$1,199,701.17	$0.00	+$202,764.35	$1,402,465.52
2022	+0.81%	$1,190,031.46	$0.00	+$9,669.71	$1,199,701.17
2021	+20.59%	$986,824.87	$0.00	+$203,206.59	$1,190,031.46
2020	+12.82%	$874,655.60	$0.00	+$112,169.27	$986,824.87
2019	+24.56%	$702,183.47	$0.00	+$172,472.13	$874,655.60
2018	-1.26%	$711,136.40	$0.00	-$8,952.93	$702,183.47
2017	+12.33%	$633,078.14	$0.00	+$78,058.26	$711,136.40
2016	+15.75%	$546,940.28	$0.00	+$86,137.86	$633,078.14
2015	+0.15%	$546,101.43	$0.00	+$838.85	$546,940.28
2014	+19.64%	$456,465.26	$0.00	+$89,636.17	$546,101.43
2013	+41.70%	$322,142.95	$0.00	+$134,322.31	$456,465.26
2012	+19.51%	$269,559.28	$0.00	+$52,583.67	$322,142.95
2011	+16.33%	$126,513.16	+$118,684.57	+$24,361.55	$269,559.28

 

Good stuff thanks for sharing Charlie! Can't argue with an average 15% return, great results and great patience.

[SharperDingaan]

21 hours ago, dealraker said:

Not a disrespectful or overly challenging post from me SharperDingaan, but one for thought.  I'd say most of my net worth today is because I did not "take $ off the table as the position performed." 

 

No worries! it's just a different approach. We systematically take $ off the table, because we invest in oil/gas (high volatility) ... and forever have the well-known bumper sticker branded on our ass ...  “Please God, give me one more oil boom. I promise not to piss it all away next time.” Obsidian being a very good example!

 

Truly despised back in the day (and still is), OBE was < CAD 30c (post 7:1 consolidation) at one point, run by idiots ... and you couldn't spit/sh1t it far enough! But ....  good bones can carry a lot of sh1te; and despite managements (& the markets) best efforts, OBE refused to die.

 

We had progressively swing traded down, eventually ending up with a huge position (and a lot of capital 'at risk') that would buy us a house (mortgage free) if it worked out, and were ridiculed! Fast forward; it has worked out very well, we have a nice house mortgage free, and 40% of the original position left - now entirely funded with house money. Were OBE to go to zero tomorrow we've still won. However, we continue to hold 'cause we're pretty sure that isn't going to happen.

 

Future promise is always alluring, but how much is it actually worth today? We use a 35% discount rate, and on concentrated positions ... prefer to reduce our 'at risk' capital to manageable levels as soon as practical. Sure we give up opportunity  ...  but when you will still be up millions, it really doesn't matter; and is a small price to pay for a sound sleep every night.  

 

Wouldn't do this with a BRK; but I'd be an idiot not to .... were I investing in a highly volatile BTC-ETF. Different strokes.

 

SD

 

 

 

 

 

Edited August 27 by SharperDingaan

[hasilp89]

8 minutes ago, SharperDingaan said:

 

No worries! it's just a different approach. We systematically take $ off the table, because we invest in oil/gas (high volatility) ... and forever have the well-known bumper sticker branded on our ass ...  “Please God, give me one more oil boom. I promise not to piss it all away next time.” Obsidian being a very good example!

 

Truly despised back in the day (and still is), OBE was < CAD 30c (post 7:1 consolidation) at one point, run by idiots ... and you couldn't spit/sh1t it far enough! But ....  good bones can carry a lot of sh1te; and despite managements (& the markets) best efforts, OBE refused to die.

 

We had progressively swing traded down, eventually ending up with a huge position (and a lot of capital 'at risk') that would buy us a house (mortgage free) if it worked out, and were ridiculed! Fast forward; it has worked out very well, we have a nice house mortgage free, and 40% of the original position left - now entirely funded with house money. Were OBE to go to zero tomorrow we've still won. However, we continue to hold 'cause we're pretty sure that isn't going to happen.

 

Future promise is always alluring, but how much is actually worth today? We use a 35% discount rate, and on concentrated positions ... prefer to reduce our 'at risk' capital to manageable levels as soon as practical. Sure we give up opportunity cost ...  but when you will still be up millions, it really doesn't matter; and is a small price to pay for a sound sleep every night.  

 

Wouldn't do this with a BRK; but I'd be an idiot not to .... were I investing in a highly volatile BTC-ETF. Different strokes.

 

SD

 

 

 

 

 

I’ve always enjoyed your perspective.

Your post above reminds me of Buffett’s quote:

“Most of man’s problems

arise from forgetting what he is trying to do” WEB

Seems you focus on what you are trying to do and go from there. Managing risk and not losing money is paramount. You’ve achieved your goals by focusing on what they are first and then focusing on the process.

 

How you manage liquidity on some of these smaller names given the sums I imagine you’re investing is another question.

 

[SharperDingaan]

5 minutes ago, hasilp89 said:

How you manage liquidity on some of these smaller names given the sums I imagine you’re investing is another question.

 

 

We periodically pull capital out of the equity portfolio to keep it within our tolerance (forced sale), and park the funds in T-Bills/Canada's/BTC/UBS for a time before ultimately repatriating some of the capital. Creates an always-on-call marginable liquidity cushion should we need it. 

 

We can also 'sidecar' the equity portfolio as we need to, via 're-assignment'. We treat BTC/UBS as cash equivalents which a lot of others wouldn't do .... a privilege that comes with managing your own funds vs OPM.

 

SD

[Kizion]

43 minutes ago, SharperDingaan said:

 

We periodically pull capital out of the equity portfolio to keep it within our tolerance (forced sale), and park the funds in T-Bills/Canada's/BTC/UBS for a time before ultimately repatriating some of the capital. Creates an always-on-call marginable liquidity cushion should we need it. 

 

We can also 'sidecar' the equity portfolio as we need to, via 're-assignment'. We treat BTC/UBS as cash equivalents which a lot of others wouldn't do .... a privilege that comes with managing your own funds vs OPM.

 

SD

What is UBS standing for? Is it the Swiss bank?