Gyroscopic Investing

Why not BRKB: Berkshire Hathaway INC for the stock portion of the Permanent Portfolio?

Not enough volatility.
Too many eggs in one basket.
Manager risk.

A fine vp choice, though.

Why use Berkshire Hathaway? In your opinion, what advantage is there in using it over a general stock index for the PP?

mukramesh wrote: Why use Berkshire Hathaway? In your opinion, what advantage is there in using it over a general stock index for the PP?

One advantage is no dividends if you are accumulating

mukramesh wrote: Why use Berkshire Hathaway? In your opinion, what advantage is there in using it over a general stock index for the PP?

Berkshire Hathaway is a multinational conglomeration of a diverse array of stocks  picked by a guy who has beaten the S&P repeatedly, and with lower fees than any ETF.

Tracking error?

The guys running Berkshire are getting very old.  An article on cbsmarketwatch.com said their new hires did not beat the s & p 500 in 2014.

The no fees idea is nice but VTI may be the better bet.

bedraggled wrote: The guys running Berkshire are getting very old.  An article on cbsmarketwatch.com said their new hires did not beat the s & p 500 in 2014.

The no fees idea is nice but VTI may be the better bet.

Yeah, I'm wondering what'll happen to Berkshire Hathaway when Buffett departs.  What'll be it's price?  and will it even continue to trade?

In Buffett videos on Youtube, Warren suggested the returns for Berkshire would approach normalcy.

The new people, who probably will not have Buffett's or Munger's talent, may effect just that.

robtkatz wrote:

mukramesh wrote: Why use Berkshire Hathaway? In your opinion, what advantage is there in using it over a general stock index for the PP?

Berkshire Hathaway is a multinational conglomeration of a diverse array of stocks  picked by a guy who has beaten the S&P repeatedly, and with lower fees than any ETF.

However, it's very telling that that guy who has beaten the S&P has chosen the S&P as the investment for his progeny. Just google it even you haven't seen it already: Buffett wants his heirs to use 90% S&P, 10% cash or short-term treasuries. Not Berkshire shares.

There may be more underlying the story of why he wants his heirs to be in the S&P500. IIRC, Buffett has some very strong beliefs around not giving his heirs a lot of wealth. He has a "I worked hard, so you have to make your own way" type of mentality. He's definitely not solving for maximizing his heirs' wealth when it comes to all his decisions.

More telling would be what he's doing with money that he plans to donate or go to causes that he cares about, beyond enriching his "lucky sperm club" members.

Sam Brazil wrote: More telling would be what he's doing with money that he plans to donate or go to causes that he cares about, beyond enriching his "lucky sperm club" members.

Its all going to the Bill and Melinda Gates Foundation which, so far, aren't careerists.