1Wk·

Depot update - conversion in full swing 🔄

Today I increased my position in Berkshire Hathaway (B) sold.

📉 Reason: Even though the company is strong in the long term, it no longer fulfills a clear strategic role in my portfolio and is covered by broadly diversified core ETFs.

💰 Use of funds: Reallocation to global core ETFs to simplify and focus the portfolio structure.

Goal remains: Fewer individual stocks, more clear structure and long-term stability.

13.08

Berkshire Hathaway (B)

Sold at €401.31

11 Comments

TaxesAreTheft@TaxesAreTheft

1Wk

I like Berkshire a lot, but am increasingly thinking about selling, especially since they invest virtually no new capital. that's nice as a hedge, especially in uncertain times, but I don't like the fact that apart from treasury bills nothing is done with the money, especially when there are plenty of good opportunities.

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Soprano@Soprano

1Wk

@TaxesAreTheft I'll wait and see who the new CEO is. At the moment, every second person is selling the shares because Buffet is no longer taking any major risks shortly before retirement and the new CEO is not trusted to do anything for the time being

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TaxesAreTheft@TaxesAreTheft

1Wk

@Soprano I think the new CEO can't really do anything wrong. BRK simply has to invest its capital steadily and grow, that's actually a no-brainer. But they just have to do something with the money, I'm looking forward to the 13f filing.

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JCM@TheStoic

1Wk

@Soprano @TaxesAreTheft Berkshire is not just an investment company, but a broad-based business conglomerate. Even without further major investments, many well-positioned companies are wholly or partly owned and generate massive cash flow.

The current share price setback is mainly due to declining sales and somewhat lower margins caused by tariffs, persistently high material and energy prices as well as inflation and not (only) because Buffett is stepping down as CEO at the end of the year.
(In the second quarter, there were also high write-downs on the $KHC losses, which further depressed profits)

Greg Abel, the designated successor, has been deeply involved for years. He was instrumental in the successful Japan investments and there are many indications that Buffett has been handing over key decisions to him for some time. At Abel's side are two excellent capital allocators, Todd Combs and Ted Weschler, who have already achieved casual returns in the region of ~80,000% over a period of around 20 years before their time at Berkshire.

The high capital cushion is also a clear advantage for Abel. If a great market opportunity arises, he can invest an incredible amount of money and therefore has huge capital leverage. You just wait for attractive (fairly valued) opportunities and they don't appear every day, especially not in an environment in which the stock markets are climbing from all-time high to all-time high.

As long as the holding companies and the insurance division generate a steady cash flow, part of which flows conservatively into low-risk bonds and the rest is available for major opportunities, the company value can continue to rise in the future and with it the share price. Even if the time of gigantic outperformance is probably over (Berkshire is now too big for that), I don't think it's unlikely that the company will outperform the S&P by a few percentage points in the next few years.

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TaxesAreTheft@TaxesAreTheft

1Wk

@TheStoic I think you have slightly misunderstood something, I am very familiar with Berkshire and know that Berkshire is a real fortress. The "problem" I see is that although Buffet has always preached not to time the market, he has been trying to do so for over 5 years and the opportunities they have had have not been taken. They would have been better off if they had continuously increased their positions on a quarterly basis. The large cash position unfortunately brings little to no shareholder value, the 5% risk free is nice but massively lowers the average portfolio yield. As far as I'm concerned, they can keep a cash cushion of 200bn, that's more than enough to make spontaneous takeovers or go shopping in a crash. The reason why Berkshire outperformed was the portfolio yield of holdings and subsidiaries. Berkshire should simply buy up one of the old asset managers like $TROW $STT or even $MSCI and offer its own ETFs, Berkshire would be an ingenious brand name for ETFs.

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Soprano@Soprano

1Wk

@TaxesAreTheft But you also know that such takeovers are subject to approval?

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TaxesAreTheft@TaxesAreTheft

1Wk

@Soprano yes, that's why I didn't suggest S&P or Brown&Brown. Btw the 13F was pretty disappointing in my opinion

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JML@JohannaMichel-Leitner

1Wk

@TaxesAreTheft I wouldn't rule out the possibility that they already know what they're doing, whether we like it or not. If you look at producer prices, there may be favorable opportunities in the next few months where they can get in with their cash.

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K@TechNav

1Wk

BRK has been delivering for decades....

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Compounder@FirstCompounder

1Wk

The stock market is a gigantic money redistribution machine, from the impatient to the patient. Warren Buffet

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Marcus@Helleone

1Wk

Continue to invest. I think the setback caused by Heinz Kraft depreciation is excessive.
For me, it is basically an actively managed fund only without fees

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