4 ms·

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 geni

by 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.
  - phil21 10mo ago
    Mostly because I don't trust myself to push cash into the market when there is blood on the streets. Or really ever, for that matter. Both due to thinking "everything is still overvalued" as well as decision paralysis even when/if I do feel the time is generally right. I'm generally overly conservative, so this is somewhat of a middle ground. Along the lines of the best diet is the one you can consistently stick with, not necessarily the most theoretically optimal one. Same goes with investing for me. I intellectually understand it's likely a worse bet than just dumping 100% into VTI or whatnot, but investing isn't simply a mathematical game - at least in my case. > A tidal wave has been rolling through this country sweeping away everyone who follows the safe socially sanctioned wisdom about investing. Agreed. I'd be retired now if I would have been able to shake the conventional wisdom in this area and just YOLO'ed it.
    - jart 10mo ago
      Math is only useful when you apply it to something that has value, like knowledge. Warren Buffett got it by reading balance sheets all day. He'd see through all the smooth talking and marketing because of it. One of the things that makes the system broken these days is no one has time to do what he did. People just park their money in passive funds like VTI. I'd be surprised if even Vanguard read these companies balance sheets. Although I know the fund managers care a lot about environment social governance.
  - leogao 10mo ago
    where are you getting this 39% figure? inflation in 2025 was only 2.7%.
    - jart 10mo ago
      What are you going off? CPI? For thousands of years gold has been the benchmark of currencies. For example you can read the Code of Hammurabi from Ancient Babylon where they used gold and silver as their currency, and then convert the figures mentioned in their laws. You'd be surprised by how invariant everything seems. https://justine.lol/inflation/ https://justine.lol/inflation/ CPI isn't a trustworthy indicator. The government can't tell the truth about inflation because retirees all own TIPS so the government would have to pay them obscene amounts of money if the official numbers went up, which it can't afford, because the whole reason the government is debasing the currency in the first place is to pay for all the other benefits it gives to retirees.
tim333 10mo ago
Berkshire's cash holdings are pretty different from an S&P 500 index fund.

by paxys 10mo ago

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.
- phil21 10mo ago
  Mostly because I don't trust myself to push cash into the market when there is blood on the streets. Or really ever, for that matter. Both due to thinking "everything is still overvalued" as well as decision paralysis even when/if I do feel the time is generally right. I'm generally overly conservative, so this is somewhat of a middle ground. Along the lines of the best diet is the one you can consistently stick with, not necessarily the most theoretically optimal one. Same goes with investing for me. I intellectually understand it's likely a worse bet than just dumping 100% into VTI or whatnot, but investing isn't simply a mathematical game - at least in my case. > A tidal wave has been rolling through this country sweeping away everyone who follows the safe socially sanctioned wisdom about investing. Agreed. I'd be retired now if I would have been able to shake the conventional wisdom in this area and just YOLO'ed it.
  - jart 10mo ago
    Math is only useful when you apply it to something that has value, like knowledge. Warren Buffett got it by reading balance sheets all day. He'd see through all the smooth talking and marketing because of it. One of the things that makes the system broken these days is no one has time to do what he did. People just park their money in passive funds like VTI. I'd be surprised if even Vanguard read these companies balance sheets. Although I know the fund managers care a lot about environment social governance.
- leogao 10mo ago
  where are you getting this 39% figure? inflation in 2025 was only 2.7%.
  - jart 10mo ago
    What are you going off? CPI? For thousands of years gold has been the benchmark of currencies. For example you can read the Code of Hammurabi from Ancient Babylon where they used gold and silver as their currency, and then convert the figures mentioned in their laws. You'd be surprised by how invariant everything seems. https://justine.lol/inflation/ https://justine.lol/inflation/ CPI isn't a trustworthy indicator. The government can't tell the truth about inflation because retirees all own TIPS so the government would have to pay them obscene amounts of money if the official numbers went up, which it can't afford, because the whole reason the government is debasing the currency in the first place is to pay for all the other benefits it gives to retirees.

tim333 10mo ago

Berkshire's cash holdings are pretty different from an S&P 500 index fund.