5 ms·

I wonder how this will affect BRK-B, given that so many investors (or at least the "retail " ones) buy its shares with the assumption that they provide exposure

I wonder how this will affect BRK-B, given that so many investors (or at least the "retail " ones) buy its shares with the assumption that they provide exposure to Buffett's strategy. In any case, I hope Warren can experience not working at all in the few years he likely has left after being alive for over 1/3 of his country's existence!

Cheezmeister 10mo ago
I don't know the guy, but by all indications he is even-keeled, low-stress, conscientious but come what may. Given his nationality and net-worth, I'd wager that Warren is a centenarian in waiting, unless and until he chooses to invest in the afterlife. Whichever comes first. Respect.
scotty79 10mo ago
There's no Buffett's strategy. Market buys whatever Buffett's company bought. That's how he got unusual gains. Moment of fame stretched over 60 year of clipping coupons off of that initial fame. The thing that made it possible was that he was content with his performance and never tried to one up himself. He kept his fame and market interest in him simmering over six decades inatead burning out in one bright flash.
- irishcoffee 10mo ago
  > There's no Buffett's strategy. Market buys whatever Buffett's company bought. That's how he got unusual gains. That sure does trivialize him. If that was your goal, you nailed it. I personally don’t think that’s a fair take, but I’ve no interest in trying to change your mind.
  - scotty79 10mo ago
    > That sure does trivialize him. If that was your goal, you nailed it. Pretty much. I'm always interested what's left once I reject te ususal narratives that people keep repeating to each other. I find this kind of excercise insightful and satisfying. While in every working thing there's myriad of significant details, the main engine of operation is usually just one usually quite straightforward thing. I like making attempts at recognizing those main things. I'm sometimes wrong but even when I am I find satisfaction that I tried instead just repeating some selection of what other people said.
  - tommy92 10mo ago
    Yes its the typical attitude than gives HN users a bad name. And this particular comment doesn't seem to have done beyond surface level research either on his investment works. Maybe not even surface level. Too much confidence too little works just empty words.
    - tome 10mo ago
      I've begun to call it (in my own head) "pessimissivism", a fatal combination of being pessimistic and dismissive. It can't be unique to HN, but I find it particularly jarring that it has taken root here, given the optimistic and open-minded origins of this forum.
      - scotty79 10mo ago
        We are talking about about billionaires gambling with company issued casino chips while messing up the actual brick and mortar economy. Being open-minded and optimistic about this activity brought us such wonderful events as 2008.
        tome 10mo ago
        Value investing a la Buffett and Munger is certainly not how we got 2008. Quite the opposite. In fact they were some of the most prominent individuals before 2008 outspoken about the risks of the derivatives that led to 2008, calling them "financial weapons of mass destruction".
        scotty79 10mo ago
        It's the same casino. I don't have any leeway for people who partake in this "responsibly".
        tome 10mo ago
        Right, and that's what I see as dismissive.
- enjeyw 10mo ago
  I used to share a somewhat similar sentiment. I know one anecdote is not data, but his investment in BYD all the way back in 2008 does counter that viewpoint somewhat - his investment success in the BYD case isn’t from other investors following him in, it’s from him identifying BYD as a successful company far before any other major investors did.
  - tim333 10mo ago
    Minor nit - it was Charlie Munger who identified and argued for BYD.
    - enjeyw 10mo ago
      Oh I didn’t know that! Thanks for the clarification.
- tim333 10mo ago
  That doesn't explain how he did well before people had heard of him. Also if you read his letters he talks about his strategy and it's not that.
  - scotty79 10mo ago
    Dead clock is perfectly accurate twice every day. He has plausible narratives for his success and that was enough to manufacture fame out of his initial random success. And the fame carried him for decades.
- JumpCrisscross 10mo ago
  > There's no Buffett's strategy There is and it’s found in float, leverage and low-volatility assets [1]. If you look at what he does, that becomes clear. If you only pay attention to how people talk about him on the internet, you’ll be misled into seeing trend following. [1] https://www.nber.org/system/files/working_papers/w19681/w19681.pdf https://www.nber.org/system/files/working_papers/w19681/w196...
  - scotty79 10mo ago
    You can invent any strategy and you will be consistently successful if you get the flock to follow you. And if you don't, your strategy will crash and burn eventually, whatever it might be. The prolonged success of Buffet's strategy doesn't lie in the strategy. It lies solely in his fame and market followers.
paxys 10mo ago
BRK is now (since the last 10-20 years) large and diversified enough that it more or less tracks the S&P 500 and the overall stock market. There isn't some genius trading strategy in there. Buffett himself tells everyone who will listen to buy and hold a diversified index fund for a long period of time.
- zeroonetwothree 10mo ago
  BRK and VOO have a correlation of 0.7 over the past 5 years. That's high enough that they have been relatively similar, but not so high that I would really say it "tracks" it. Of course, no one knows the future so who knows if this will continue.
  - eigen 10mo ago
    random web correlation calculator shows it has deviated since around May this year and is currently around 0.3 https://www.portfoliovisualizer.com/asset-correlations#analysisResults https://www.portfoliovisualizer.com/asset-correlations#analy...
- phil21 10mo ago
  BRK is like a conservative S&P500. It offers enough diversification off the "total market" funds for me that I invest a small but material portion of my "safe money" with them. Sort of like holding boring dividend stocks without the dividend.
  - jart 10mo ago
    BRK has a beta of 0.7 (meaning it's less volatile than the market) because a third of it is just cash (probably because they want to buy the blood in the next crash like they did in 2000) so I'm curious why you wouldn't just keep that part of your portfolio in cash like he does? Now me personally I think that strategy is kind of dated because the dollar has lost 39% of its value over the last twelve months because it's only as good as the blood sweat and tears of the people who mint it. Dividend stocks like Heinz aren't good investments these days either, since as far as I can tell, those dividends have been coming straight out of the stock's value. Even Buffett turned his back on them. A tidal wave has been rolling through this country sweeping away everyone who follows the safe socially sanctioned wisdom about investing.
user3939382 10mo ago
Last I heard he had a couple guys working for him who sound extremely smart and explained it’s almost impossible to beat the S&P but they try.
tstrimple 10mo ago
> In any case, I hope Warren can experience not working at all in the few years he likely has left after being alive for over 1/3 of his country's existence! Honestly I struggle to understand the desire of folks earning an income to wish the best for folks who have literally never struggled in their lives. This hero worship of billionaires is bizarre in the extreme. Warren Buffet earned his billions on investments from friends and family that the vast, vast majority of people have zero access to. But people keep acting as if he is some sort of genius because he was able to grow an equivalent of $1MM in investments from friends and family at a time when basically every single fucking industry in the country was growing at crazy rates. Capital begets capital. Wake me up when someone actually comes from rags and doesn't just try to weave that into their propaganda.

Cheezmeister 10mo ago

I don't know the guy, but by all indications he is even-keeled, low-stress, conscientious but come what may. Given his nationality and net-worth, I'd wager that Warren is a centenarian in waiting, unless and until he chooses to invest in the afterlife. Whichever comes first. Respect.

scotty79 10mo ago

There's no Buffett's strategy. Market buys whatever Buffett's company bought. That's how he got unusual gains. Moment of fame stretched over 60 year of clipping coupons off of that initial fame. The thing that made it possible was that he was content with his performance and never tried to one up himself. He kept his fame and market interest in him simmering over six decades inatead burning out in one bright flash.

irishcoffee 10mo ago
> There's no Buffett's strategy. Market buys whatever Buffett's company bought. That's how he got unusual gains. That sure does trivialize him. If that was your goal, you nailed it. I personally don’t think that’s a fair take, but I’ve no interest in trying to change your mind.
- scotty79 10mo ago
  > That sure does trivialize him. If that was your goal, you nailed it. Pretty much. I'm always interested what's left once I reject te ususal narratives that people keep repeating to each other. I find this kind of excercise insightful and satisfying. While in every working thing there's myriad of significant details, the main engine of operation is usually just one usually quite straightforward thing. I like making attempts at recognizing those main things. I'm sometimes wrong but even when I am I find satisfaction that I tried instead just repeating some selection of what other people said.
- tommy92 10mo ago
  Yes its the typical attitude than gives HN users a bad name. And this particular comment doesn't seem to have done beyond surface level research either on his investment works. Maybe not even surface level. Too much confidence too little works just empty words.
  - tome 10mo ago
    I've begun to call it (in my own head) "pessimissivism", a fatal combination of being pessimistic and dismissive. It can't be unique to HN, but I find it particularly jarring that it has taken root here, given the optimistic and open-minded origins of this forum.
    - scotty79 10mo ago
      We are talking about about billionaires gambling with company issued casino chips while messing up the actual brick and mortar economy. Being open-minded and optimistic about this activity brought us such wonderful events as 2008.
      - tome 10mo ago
        Value investing a la Buffett and Munger is certainly not how we got 2008. Quite the opposite. In fact they were some of the most prominent individuals before 2008 outspoken about the risks of the derivatives that led to 2008, calling them "financial weapons of mass destruction".
        scotty79 10mo ago
        It's the same casino. I don't have any leeway for people who partake in this "responsibly".
        tome 10mo ago
        Right, and that's what I see as dismissive.
enjeyw 10mo ago
I used to share a somewhat similar sentiment. I know one anecdote is not data, but his investment in BYD all the way back in 2008 does counter that viewpoint somewhat - his investment success in the BYD case isn’t from other investors following him in, it’s from him identifying BYD as a successful company far before any other major investors did.
- tim333 10mo ago
  Minor nit - it was Charlie Munger who identified and argued for BYD.
  - enjeyw 10mo ago
    Oh I didn’t know that! Thanks for the clarification.
tim333 10mo ago
That doesn't explain how he did well before people had heard of him. Also if you read his letters he talks about his strategy and it's not that.
- scotty79 10mo ago
  Dead clock is perfectly accurate twice every day. He has plausible narratives for his success and that was enough to manufacture fame out of his initial random success. And the fame carried him for decades.
JumpCrisscross 10mo ago
> There's no Buffett's strategy There is and it’s found in float, leverage and low-volatility assets [1]. If you look at what he does, that becomes clear. If you only pay attention to how people talk about him on the internet, you’ll be misled into seeing trend following. [1] https://www.nber.org/system/files/working_papers/w19681/w19681.pdf https://www.nber.org/system/files/working_papers/w19681/w196...
- scotty79 10mo ago
  You can invent any strategy and you will be consistently successful if you get the flock to follow you. And if you don't, your strategy will crash and burn eventually, whatever it might be. The prolonged success of Buffet's strategy doesn't lie in the strategy. It lies solely in his fame and market followers.

paxys 10mo ago

BRK is now (since the last 10-20 years) large and diversified enough that it more or less tracks the S&P 500 and the overall stock market. There isn't some genius trading strategy in there. Buffett himself tells everyone who will listen to buy and hold a diversified index fund for a long period of time.

zeroonetwothree 10mo ago
BRK and VOO have a correlation of 0.7 over the past 5 years. That's high enough that they have been relatively similar, but not so high that I would really say it "tracks" it. Of course, no one knows the future so who knows if this will continue.
- eigen 10mo ago
  random web correlation calculator shows it has deviated since around May this year and is currently around 0.3 https://www.portfoliovisualizer.com/asset-correlations#analysisResults https://www.portfoliovisualizer.com/asset-correlations#analy...
phil21 10mo ago
BRK is like a conservative S&P500. It offers enough diversification off the "total market" funds for me that I invest a small but material portion of my "safe money" with them. Sort of like holding boring dividend stocks without the dividend.
- jart 10mo ago
  BRK has a beta of 0.7 (meaning it's less volatile than the market) because a third of it is just cash (probably because they want to buy the blood in the next crash like they did in 2000) so I'm curious why you wouldn't just keep that part of your portfolio in cash like he does? Now me personally I think that strategy is kind of dated because the dollar has lost 39% of its value over the last twelve months because it's only as good as the blood sweat and tears of the people who mint it. Dividend stocks like Heinz aren't good investments these days either, since as far as I can tell, those dividends have been coming straight out of the stock's value. Even Buffett turned his back on them. A tidal wave has been rolling through this country sweeping away everyone who follows the safe socially sanctioned wisdom about investing.

user3939382 10mo ago

Last I heard he had a couple guys working for him who sound extremely smart and explained it’s almost impossible to beat the S&P but they try.

tstrimple 10mo ago

> In any case, I hope Warren can experience not working at all in the few years he likely has left after being alive for over 1/3 of his country's existence! Honestly I struggle to understand the desire of folks earning an income to wish the best for folks who have literally never struggled in their lives. This hero worship of billionaires is bizarre in the extreme. Warren Buffet earned his billions on investments from friends and family that the vast, vast majority of people have zero access to. But people keep acting as if he is some sort of genius because he was able to grow an equivalent of $1MM in investments from friends and family at a time when basically every single fucking industry in the country was growing at crazy rates. Capital begets capital. Wake me up when someone actually comes from rags and doesn't just try to weave that into their propaganda.