Investing in Berkshire in your 20s

[Charlie]

It all depends on price.

 

If you can buy Berkshire cheap buy a lot.

I wouldn´t buy the S&P 500 at record high. That´s probably not a good idea. Buy it when it is off 30-50% of record high.

Beware of low quality companies, low quality managment, low quality countries and companies with too much leverage. 

Every point can kill you.

You have to have conviction in your investments and you have to be right.

And don´t buy crypto. 

Edited 18 hours ago by Charlie

[pine]

Almost all the capital I have given my nine-year old is in Berkshire. For me it was the mixture of safety, maybe 9% growth and its being diversified.   I am a lazy investor and also I didn't want tax activity. 

[boilermaker75]

4 hours ago, pine said:

Almost all the capital I have given my nine-year old is in Berkshire. For me it was the mixture of safety, maybe 9% growth and its being diversified.   I am a lazy investor and also I didn't want tax activity. 

 

I did the same for our daughter starting about 25 years ago. 

 

With apologies to the Chinese proverb about trees, The best time to buy BRK was 20 years ago and the second best time is today.

[73 Reds]

8 minutes ago, boilermaker75 said:

 

I did the same for our daughter starting about 25 years ago. 

 

With apologies to the Chinese proverb about trees, The best time to buy BRK was 20 years ago and the second best time is today.

Likewise.  When my kids were growing up I'd buy them small amounts of several stocks each year, Berkshire always being among them.  Happily, they still own all their shares.

[Viking]

17 minutes ago, 73 Reds said:

Likewise.  When my kids were growing up I'd buy them small amounts of several stocks each year, Berkshire always being among them.  Happily, they still own all their shares.

 

@boilermaker75 and @73 Reds and @pine, thanks for sharing. My three kids started down a similar path 4 years ago (early 20's). Today they each have almost 100 shares of Fairfax (they have all been aggressive buyers in recent months). The kicker is in Canada we have lots of tax free accounts (FHSA, TFSA, RRSP, RESP). And capital gains are taxed at a low rate (50% of the gain is tax free).

 

What is better than a high CAGR over 20 years? A high CAGR that is tax free.

 

In 20 years time, I think my kids will be very happy with the result. The set-up for young people in Canada to grow wealth with financial assets is amazing. 

Edited 8 hours ago by Viking

[djokovic1]

Personally I wouldn't buy Berkshire, as my opportunity cost is 15-20% IRR. But Berkshire is definitely a sleep well investment with low downside risk.

[Spekulatius]

2 hours ago, djokovic1 said:

Personally I wouldn't buy Berkshire, as my opportunity cost is 15-20% IRR. But Berkshire is definitely a sleep well investment with low downside risk.

15-20% is a high hurdle. With a hurdle that high, the risk of overstretching is high and they can lead to permanent losses if things go sideways. I wonder how you think about this.

 

Back to topic, I think BRKB is a defensive investment and probably not for someone’s in this. 20’s. I do think it can be used as portfolio anchor stock ans other have alluded to.

[Parsad]

7 hours ago, Viking said:

 

@boilermaker75 and @73 Reds and @pine, thanks for sharing. My three kids started down a similar path 4 years ago (early 20's). Today they each have almost 100 shares of Fairfax (they have all been aggressive buyers in recent months). The kicker is in Canada we have lots of tax free accounts (FHSA, TFSA, RRSP, RESP). And capital gains are taxed at a low rate (50% of the gain is tax free).

 

What is better than a high CAGR over 20 years? A high CAGR that is tax free.

 

In 20 years time, I think my kids will be very happy with the result. The set-up for young people in Canada to grow wealth with financial assets is amazing. 

 

Yup!  As long as their parents have taught them how to live below their means like you have and save a portion of their income.  Parents who don't know how to save or spend above their means, tend to pass those habits on to their children.  I hope more parents do what you did!  Cheers!

[Parsad]

3 hours ago, djokovic1 said:

Personally I wouldn't buy Berkshire, as my opportunity cost is 15-20% IRR. But Berkshire is definitely a sleep well investment with low downside risk.

 

1 hour ago, Spekulatius said:

15-20% is a high hurdle. With a hurdle that high, the risk of overstretching is high and they can lead to permanent losses if things go sideways. I wonder how you think about this.

 

Back to topic, I think BRKB is a defensive investment and probably not for someone’s in this. 20’s. I do think it can be used as portfolio anchor stock ans other have alluded to.

 

It's ok to aim for a high hurdle, just don't be disappointed if you fall short a bit. 

 

Better to aim high and fall short a bit, then accept average and be satisfied when you are young...this goes for sex with your wife or girlfriend!    Cheers!