Berkshire Hathaway B

[MPMD]

was doing a little rebalancing today.
basically the only stock i own is BRKB.
obviously it has absolutely crushed since i've owned it.
can someone explain to me why for those of us that are just buying and holding in tax deferred accounts we shouldn't view BRKB as the world's best mutual fund?

[G]

It's actively managed.

Dont get me wrong,, I own a bunch (in taxable). Why tax deferred?

[abds]

Maybe it is basically the world’s best mutual fund (no dividends, Warren Buffett as your fund manager). But it’s a mutual fund of select large cap companies. It might mirror the S&P or total market but it isn’t either of those. So I don’t use it over index funds.

[CordMcNally]

It will also be interesting to see what happens when the two main guys (who are in their 90s) aren’t there anymore. I have no doubt they’ve molded their replacements but still not the same.

[MPMD]

It's actively managed.

Dont get me wrong,, I own a bunch (in taxable). Why tax deferred?

qualified accounts:taxable for us is 70:1
have always had tons of available space (2 MD) and always maxed it out
yes i know we need to start thinking about RMDs

[G]

qualified accounts:taxable for us is 70:1
have always had tons of available space (2 MD) and always maxed it out
yes i know we need to start thinking about RMDs

you're gonna need some extra dough to pay for those roth conversions, my internet friend. get to work!

[MPMD]

you're gonna need some extra dough to pay for those roth conversions, my internet friend. get to work!

i'm the WCIF in-house academic, i don't work

[AR]

was doing a little rebalancing today.
basically the only stock i own is BRKB.
obviously it has absolutely crushed since i've owned it.
can someone explain to me why for those of us that are just buying and holding in tax deferred accounts we shouldn't view BRKB as the world's best mutual fund?

I used to think of it exactly that way. And I suppose I still kind of do. I own a lot of BRK.

However, the truth is that it is not really very diversified compared to most funds people here invest in (e.g. Total Market, S&P 500). I'm sure there are other mutual funds out there that are equally undiversified. But I would never invest in those.

[Max Power]

Berkshire and Blackstone and stuff like that are not stocks... consider them like an actively managed ETF or funds with high ER and typically good performance that will make up for it. "A high tide lifts all ships." As mentioned, they are a bit diverse, but they leverage and load up on what they like (sectors, big chunks of companies, buy whole companies sometimes, real estate, etc). Berkshire might typically own 100+ stocks yet have over half their money in their top 10 or even top 5 (so many companies, but not too diversified).

They also sell a ton of covered options on stocks since they own huge blocks, sell puts with all their cash, buy each other, etc. If you look at their holdings, the holdings often lag the S&P 500... but the fund sells options and their share price therefore almost always outkicks the index (in good markets) by doing that.

They will usually go up well in good markets (gains will overshadow the active mgmt costs) and they also drop faster than total market in bad markets (the high upkeep fees will keep the price down, their options don't sell well, etc). If anything, you can usually compare Berkshire and Carlyle and stuff like that to growth stock and tech stock ETFs (RPG, etc)... they'll fly higher in good weather but also drop quite quick in turbulence.

The best time to pick any of them up is usually after a market correction; they will be more depressed in % terms than indexes and most other stuff. As was mentioned, BRKB and other stuff that gains mostly in share price is best in cash accounts.

[uksho]

qualified accounts:taxable for us is 70:1
have always had tons of available space (2 MD) and always maxed it out
yes i know we need to start thinking about RMDs

Do you have options of Roth contributions in your retirement accounts through employment? If so, would you contribute to it after certain dollar amount in tax deferred? If so , after what number ?

Or would be wise at any point to stop contributions to tax deferred and start saving in taxable ?

[MPMD]

Do you have options of Roth contributions in your retirement accounts through employment? If so, would you contribute to it after certain dollar amount in tax deferred? If so , after what number ?

Or would be wise at any point to stop contributions to tax deferred and start saving in taxable ?

yeah so this is basically my next phase of retirement planning

all good problems to have.

[Tim]

The one difference with BRK is they have a very large EFund .and the insurance business is a cash cow. No other mutual fund has that. The value of MF is determined by market price, the underlying assets. I tend to think the market price of BRK fluctuates, but not the value. The value keeps growing. Buy and hold.

[Hatton]

If I owned some I would never sell it.

[East coast]

was doing a little rebalancing today.
basically the only stock i own is BRKB.
obviously it has absolutely crushed since i've owned it.
can someone explain to me why for those of us that are just buying and holding in tax deferred accounts we shouldn't view BRKB as the world's best mutual fund?

I obviously could have chosen randomly bad/cherry picked timelines, but i just plugged BRK.B and VTI into two online returns calculators (dividends reinvested on VTI) and VTI beats it in both 10 yr and 5 yr numbers. Someone go back and check my work. They are close, but for example Jan '12 to Jan '22, VTI has 15.06% annualized returns vs. BRK.B 14.92%. I'm sure tax implications and other things if in taxable come into play with dividends, but I'm guess your assumption that it's done well recently seems incorrect?

[Lordosis]

past performance yadda yadda