If you where all cash - What would you add in 2026 with many stocks being over priced?

[Junior R]

If you where all cash - What would you add in 2026 with many stocks being over priced? 

[DooDiligence]

Novo Nordisk, Nintendo, Dominos and Berkshire

[backtothebeach]

Just starting to look into ADBE, could be a no brainer. Recurring revenue, larger moat than AI fears may suggest, low valuation, growing earnings, large buybacks.

 

Kind of reminds me of EBAY a couple of years ago.
 

Edited January 6 by backtothebeach

[coffeecaninvestor]

I was at ~40% of cash as of late last year and adding rapidly due to savings. I'd prefer to be in the 10% range. 

 

I've been buying and think are still at cheap prices PYPL, CPRT, CNSWF, BRO, ADBE, PAYX, BAH, SYY, CHD, CP, UNH, ELV, FND, ACN, STZ, AJG, ODFL. 

 

Kind of lucky that some quality compounders have gotten taken out to the wood shed lately. 

 

NTDOY, APO, DOCS, MOH, PGR are getting more attractive, but are just on my watchlist. 

 

XOM looks to me like it could make a move higher.. so I might spend some time looking at oil companies. It doesn't strike me as particularly cheap, but they haven't done much in the last 4-5 years so maybe it is time. 

[John Hjorth]

Very likely stocks in the same companies that I'm going to buy with cash present at year end 2025 and dividends received from here on.

[bizaro86]

Nintendo and CSU are where I've been adding new money recently.

[Marco Van Basten]

So, with a clean sheet, here is what I would buy:

Safran & GE in aerospace, Airbus in aerospace although a smaller position that GE or Safran, RBC bearings in aerospace/defense/industrials, Amrize in cement/sand/gravel, New England Realty (NEN) and St Joe in real estate, Moody's, Visa, Ryan in insurance brokerage, Fairfax.  (I am long all of these names.)

[TwoCitiesCapital]

CSU

FIH.TO

MOH

TGT

ALS.TO

 

Covers tech, Emerging markets infrastructure, healthcare, consumer discretionary, and materials. Fairly diversified exposure across the 5 in terms of country, sector, size, and currency.

 

Also, many of the names are diversified themselves like Altius owning many different mineral exposures, Fairfax India owning a handful of different public/private Indian infrastructure and financials, and CSU as an amalgamation of purchased tech companies. 

Edited January 9 by TwoCitiesCapital

[Eng12345]

Idk I kind of ascribe to the Lynch theory that every day is a clean sheet. 

 

Every day that you hold a stock you are in effect buying it at the current market price. One in the same. 

[Luke]

PDD and CSU

[Marco Van Basten]

50 minutes ago, Eng12345 said:

Idk I kind of ascribe to the Lynch theory that every day is a clean sheet. 

 

Every day that you hold a stock you are in effect buying it at the current market price. One in the same. 

This only makes sense if you don't pay taxes.  In the world with taxes, often a 9% return from an existing investment is better than a 12% return from a new investment. 

[Lazarus]

This thread should merge with 2026 Best Investment Ideas - Page 5 - General Discussion - Corner of Berkshire and Fairfax - The Value Investor's Haven

 

[UK]

2 hours ago, Eng12345 said:

Every day that you hold a stock you are in effect buying it at the current market price. One in the same. 

+1

[villainx]

On 1/8/2026 at 1:19 PM, Marco Van Basten said:

In the world with taxes, often a 9% return from an existing investment is better than a 12% return from a new investment. 

 

I have to keep reminding myself of this.

 

 

[Milu]

7 hours ago, villainx said:

 

I have to keep reminding myself of this.

 

 

Yes the rate of capital gains tax and the effect that would make on your capital base is so large that the investor always needs to be extra careful when realising a gain as the asset you replace it with has to make substantially larger return than the one you sold just to break even. It gets more and more important the high the cgt rate of the country/juristiction is. For example if you live in Denmark or Norway (something like 38%), France (30%) or Ireland (33%) you need to really have confidence in the sale and what you are replacing it with.

Edited January 10 by Milu

[dealraker]

1 hour ago, Milu said:

Yes the rate of capital gains tax and the effect that would make on your capital base is so large that the investor always needs to be extra careful when realising a gain as the asset you replace it with has to make substantially larger return than the one you sold just to break even. It gets more and more important the high the cgt rate of the country/juristiction is. For example if you live in Denmark or Norway (something like 38%), France (30%) or Ireland (33%) you need to really have confidence in the sale and what you are replacing it with.

As a young man growing up without parents I gravitated towards relationships with older men and for me for whatever reason these interactions resonated around finance.  One of the wisest and most successful stock market and small business guys I linked up with said this:  "Charlie, you'll make most of your mistakes in the good times."

 

And...I listened decently well to this.  Looking backwards and not necessarily using my life but more what I've seen or see I'd say that both buying and selling investments, whether it be stocks or entering/leaving a business, in the midst of a boom period can be the most destructive force as to building net worth.   Selling a good business that's maybe slightly over-valued is surely a mistake - but so is buying a not-so-good business that is seriously over-priced and subject to a re-valuation in a less than frothy market.

 

The tax man is a serious interruption of building net worth in a taxable account or entity.  I've watched a lot of people go to cash through the years.  I've never done that though.

 

The easiest win is buying stocks in a severe down market.  But you do need to be willing to see stockhis fall much further than when you bought to eventually come out ahead.

 

Rambling of course.  One last thing that I do find interesting about COBF these days, here goes:

 

We often, very often, have numerous investors posting up about how much cash they have and often it is a huge percent of their portfolio.  Two or three years ago we had changegunnacome debate heavily with Gregmal about his (change's) massive cash and bonds holdings.  Greg of course was 100% correct and change was making a pretty significant miscalculation as related to eventual market levels.

 

Today is probably the least level of what I call "cash posting" I've ever seen on investment forums I've followed.

 

Rambling.

Edited January 10 by dealraker

[73 Reds]

1 hour ago, dealraker said:

As a young man growing up without parents I gravitated towards relationships with older men and for me for whatever reason these interactions resonated around finance.  One of the wisest and most successful stock market and small business guys I linked up with said this:  "Charlie, you'll make most of your mistakes in the good times."

 

And...I listened decently well to this.  Looking backwards and not necessarily using my life but more what I've seen or see I'd say that both buying and selling investments, whether it be stocks or entering/leaving a business, in the midst of a boom period can be the most destructive force as to building net worth.   Selling a good business that's maybe slightly over-valued is surely a mistake - but so is buying a not-so-good business that is seriously over-priced and subject to a re-valuation in a less than frothy market.

 

The tax man is a serious interruption of building net worth in a taxable account or entity.  I've watched a lot of people go to cash through the years.  I've never done that though.

 

The easiest win is buying stocks in a severe down market.  But you do need to be willing to see stockhis fall much further than when you bought to eventually come out ahead.

 

Rambling of course.  One last thing that I do find interesting about COBF these days, here goes:

 

We often, very often, have numerous investors posting up about how much cash they have and often it is a huge percent of their portfolio.  Two or three years ago we had changegunnacome debate heavily with Gregmal about his (change's) massive cash and bonds holdings.  Greg of course was 100% correct and change was making a pretty significant miscalculation as related to eventual market levels.

 

Today is probably the least level of what I call "cash posting" I've ever seen on investment forums I've followed.

 

Rambling.

Yup.  Good message.  On a related note, also applicable for people who now may be considering a switch to indexing.  After a series of far above average years for large equity indexes, future results are more likely to be tempered if not downright disappointing, at least in the relatively short term.  But long enough for some to revert back to stock-picking (or cash, bonds or whatever) only before the next bull market for indices begins.

Edited January 10 by 73 Reds
words

[Eng12345]

On 1/8/2026 at 12:19 PM, Marco Van Basten said:

This only makes sense if you don't pay taxes.  In the world with taxes, often a 9% return from an existing investment is better than a 12% return from a new investment. 

Ehhh - you're going to pay taxes on the investment either way if you want to access your money ever. Never mind that fact that when switching investments, you probably shouldn't be looking for a 30% outperformance over the prior investment. You should probably be aiming higher to average lower or to reduce a perceived risk. Nevermind the fact that I don't see how anyone can reliably predict a 12% vs 9% return in stocks into perpetuity. These are businesses that respond to the real world and have real world changing conditions and no matter what taxes are a major drag. 

 

Even with that said I'm not sure you're mathematical thought process even lines up. Using the numbers you gave and assuming a tax rate of 25% I don't see how that makes sense given a yearly port turnover and taxation event. (I am by no means advocating for quick  turnovers)

 

Actually, as I think about it more wouldn't the alpha of the comparative strategies have to be less than the tax rate? Meaning in your scenario (12% vs 9%) that the effective tax rate would have to be greater than 30% for the buy and hold to outperform? I don't know that this is correct. 

 

Edited January 10 by Eng12345

[TwoCitiesCapital]

31 minutes ago, Eng12345 said:

Nevermind the fact that I don't see how anyone can reliably predict a 12% vs 9% return in stocks into perpetuity. These are businesses that respond to the real world and have real world changing conditions and no matter what taxes are a major drag. 

 

+1

 

Not only isn't it unreliable to try to predict with this level of granularity - but it would still make sense to sell. If you're sitting on a 4x and have a capital gain rate of 20-30% - you would still come out ahead by year 7-9 in the higher returning investment assuming consistent returns in each tax year. 

 

But even that doesn't account for the optionality of the path of returns. The one your selling is highly appreciated. The one you're looking at to buy may be presenting a temporary opportunity that is making it more attractive. I would argue that if you're correct about the forward looking returns, the odds are not the default 50/50 that both go up/down. The highly appreciated position may be slightly more likely to stagnate/consolidate/correct while the new opportunity may be slightly more likely to bounce. A single +10/-10 at the start makes brings the breakeven from year 7-9 to years 1 or 2. 

 

Establishing a new basis also provides optionality on taking loss carryforwards in an unfavorable environment. The loss carryforwards also then can reduce the payback period by reducing taxes paid in future years which furthers the optionality of a quicker breakeven. 

 

 

31 minutes ago, Eng12345 said:

Actually, as I think about it more wouldn't the alpha of the comparative strategies have to be less than the tax rate? Meaning in your scenario (12% vs 9%) that the effective tax rate would have to be greater than 30% for the buy and hold to outperform? I don't know that this is correct. 

 

 

Because one as an arithmetic function, and the other is an exponential one, the compound growth will ALWAYS catch up with a long-enough time horizon. Even assuming a ~50% capital gain on a 4x gains, you still come out ahead by year ~18-20 in the 12% vs 9% scenario. 

 

Larger rates make the hurdle higher. As do larger gains. But compound math is hard to overcome. If you're correct about something having a higher forward looking return and an intermediate time horizon to wait for it, I'd argue you're almost always going to be better of switching. Particularly if you've already been doing that and aren't holding onto a ton of 10-15 baggers that got through time as opposed to superior performance. 

 

The only problems crop up when you're wrong about the forward returns and now have the tax loss and a lower return. The more you switch, the lower the cost to switch and the nearer the breakevens....but also the more likely it becomes that some of the trades are mistakes.  There's going to be balance between them, but that balance isn't "hold lower performing stuff to avoid paying taxes". 

[Marco Van Basten]

2 hours ago, Eng12345 said:

Ehhh - you're going to pay taxes on the investment either way if you want to access your money ever. Never mind that fact that when switching investments, you probably shouldn't be looking for a 30% outperformance over the prior investment. You should probably be aiming higher to average lower or to reduce a perceived risk. Nevermind the fact that I don't see how anyone can reliably predict a 12% vs 9% return in stocks into perpetuity. These are businesses that respond to the real world and have real world changing conditions and no matter what taxes are a major drag. 

 

Even with that said I'm not sure you're mathematical thought process even lines up. Using the numbers you gave and assuming a tax rate of 25% I don't see how that makes sense given a yearly port turnover and taxation event. (I am by no means advocating for quick  turnovers)

 

Actually, as I think about it more wouldn't the alpha of the comparative strategies have to be less than the tax rate? Meaning in your scenario (12% vs 9%) that the effective tax rate would have to be greater than 30% for the buy and hold to outperform? I don't know that this is correct. 

 

I agree that nobody can predict the future, however we seem to try to do it daily on this site by being active rather than index investors.   For most investors in the US, capital gains tax is around 33-35%, 23.8% federal + state&local, which in NJ = 10.75%, in NYC reaches 17%, 12% in Hawaii, 9% in MA, 7% in CT, 13.3% in CA.  So selling an investment bought at 100 for 200, you are left with 165, and then if new investment outperforms by 3% per annum, break-even is after 7-8 years.  I have a stock that I bought at $3, it is now $36, so in that case, the break-even time frame, assuming 3% annual outperformance is around 15 years.  We are all active investors here, so sure if I own a stock that I think can compound at 9% per annum, and I can reinvest into something that can compound at 15% per annum for twenty years, then I will switch, however if I own something with a cost basis of $3 that sells at $36 and can compound at 9% per annum and I have the option of switching to Diageo that I think can compound at 10% per annum (7% free cash flow yield + 3% inflation), then I would be a fool to switch 

[SharperDingaan]

If you did this between stock X and cash, we would call it a swing trade. A pair trade if it were between stock X and stock Y. Sometimes ..... no tax at all if the sale and repurchase of stock X take place within 30 days.

 

The realities is that all companies change over time; the BRK of today is not the BRK that you might have bought 20 years ago and simply held. Taking advantage of tidal change should not be an impediment.

 

SD

Edited January 10 by SharperDingaan

[Masterofnone]

1 hour ago, Marco Van Basten said:

For most investors in the US, capital gains tax is around 33-35%, 23.8% federal

I would think for most investors the rate would be 15%, but your point stands. Selling puts your compounding into a hole and your new thesis better be right because the starting line gets moved back by the tax man.

Sitting on one's hands with good companies lets the miracle of compounding work its magic. But that works better with cement and jet engines than say, fashion brands. 

[KJP]

52 minutes ago, SharperDingaan said:

If you did this between stock X and cash, we would call it a swing trade. A pair trade if it were between stock X and stock Y. Sometimes ..... no tax at all if the sale and repurchase of stock X take place within 30 days.

 

 

What do you mean by this?  Are you suggesting the wash sale rule applies when the initial sale resulting in a capital gain?  If so, what taxing jurisdiction are you referring to?

Edited January 10 by KJP

[dealraker]

7 hours ago, 73 Reds said:

Yup.  Good message.  On a related note, also applicable for people who now may be considering a switch to indexing.  After a series of far above average years for large equity indexes, future results are more likely to be tempered if not downright disappointing, at least in the relatively short term.  But long enough for some to revert back to stock-picking (or cash, bonds or whatever) only before the next bull market for indices begins.

Yes.

[SharperDingaan]

Canada. Gain/Loss on the sale and repurchase of the same cusip # (stock, bond, etc) within 30 days.

 

It exists primarily to kill the practice of selling underwater positions just before year end to capture the tax loss, and a repurchase in early January to capture the rally.  To demonstrate that the intent truly was a sale, you cannot buy it back for at least one month plus a day. If you do the taxman will deem the sale to have never taken place.

 

SD

 

 

 

Edited January 11 by SharperDingaan