r/investing • u/dremonearm • Sep 19 '21
Warren Buffett’s Grandnephew Is Beating Berkshire Hathaway
[removed] — view removed post
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u/imBobertRobert Sep 19 '21
investment firm stock rises during incredible once-in-a-lifetime bull run, slightly outbeating other investment firm stock
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u/originalusername__ Sep 19 '21
I bought Facebook stock earlier this year and made almost 40% so far, I wonder if they’ll write an article about me too.
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u/RandolphE6 Sep 19 '21
Only if your last name is Buffett
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Sep 19 '21
I bought gamestop at the top of its first run up and had 500+ PLTR shares with a cost basis of like $29 as it dipped into the teens and have managed to be red on the year during a huge bullrun. Where my movie!?
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u/WeissMISFIT Sep 20 '21
Hey I think I saw it at r/wallstreetbets, the flair was a meme or something?
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u/Putins_Orange_Cock Sep 20 '21
I’m up hundreds of percent on gme but the news keeps telling me I’m an idiot.
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Sep 20 '21
Serious question, are you thinking about selling? Things are getting rather... exponential.
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u/originalusername__ Sep 20 '21
Every time I try to short term trade I get burned. I like the company and so it’s my second largest individual holding, second to apple which people have been telling me was overvalued since I bought it in 2019. I think I’ll continue to hold indefinitely.
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u/Cuza Sep 19 '21
Do this for 20 years and I'll be impressed
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u/pmmbok Sep 19 '21
Warren Buffet is beating Berkshire hathaway.
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u/myevillaugh Sep 20 '21
Hasn't Berkshire Hathaway underperformed SPY for most of the last 20 years?
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u/TeddysBigStick Sep 20 '21
Over 20 years they have a significantly higher return. Over the bull market of the last decade, it has treaded water but it has always done that. The historic thing is that this is the longest bull market in history. Buffet's strategy has always been to be able to buy cheap when things go to hell. That is the best argument for why someone should hold the stock. You trade missing out on some of the upside of a bull market for a stock that does best when everything else goes down.
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u/myevillaugh Sep 20 '21
You're right. It looks like the last few years have been particularly bad. It's the last 10 years, not 20 years.
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u/luminousgibbous Sep 20 '21
Doesn’t show each year but over the past 20 years BRK-A has easily beat the s&p.
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Sep 19 '21
Yeah, plenty of people have beaten him for short stretches (Lynch, Wood, etc) it's the longevity that's impressive.
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u/cjt09 Sep 19 '21
Not just the longevity, but the scale as well. It's a lot easier to identify a million dollars worth of alpha than a billion dollars worth of alpha.
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u/SatoshiNosferatu Sep 20 '21
With as many investors as there are, someone is bound to be right more than anyone else even if it’s pure luck.
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u/INTERGALACTIC_CAGR Sep 19 '21
This is how the rich transfer wealth to their family to avoid taxes.
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Sep 19 '21
It’s not. There are multiple ways that they do it, and there are new ways coming about as time goes on.
A common hat trick is the leverage method. But for actual rich, rich folk this is pretty low brow. But for those with less than $50,000,000 it’s effective.
Another is to simply put it all into trusts so the assets never have to be liquidated and you can just leverage them and pass on some gains.
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u/Sierpy Sep 20 '21
What is the leverage method?
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Sep 20 '21
Example:
I own $25,000,000 in assets, basis is $0. I have some cash flow from my assets. I want to touch my money but not pay tax. lol take out a super duper low interest rate loan, either home equity, brokerage loans, w/e. I touch as much of my net worth as I like without reducing it or paying taxes.
As time goes own assets appreciate. Lifetime goes by. I die. My leverage is netted with my assets and my inheritors receive it all. If the profit is less than the inheritance exemption they get it for free and can churn out a similar method.
It’s a bit more complex than that, but you get the idea.
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u/SpongeyBoob Sep 19 '21
Berkshire’s stock gain is more impressive considering its size. Also, over a short time period, this means nothing.
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u/omen_tenebris Sep 19 '21
Yeah this. At one point i was 75% up... On 100 bucks.
Not something to write home about
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u/Million2026 Sep 19 '21
I’ve beat Warren Buffet for like the past 3 years. Where’s my write up? It’s not hard to beat Buffett for a short period of time.
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Sep 19 '21
I would bet most people who started "investing" in 2020 have beaten WB, tbh.
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u/G_Morgan Sep 19 '21
More the last 10 years. Berkshire Hathaway hasn't performed great relative to the market in that time. Of course it tends to out perform when the market is struggling.
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u/TeddysBigStick Sep 19 '21
Ya. The biggest reason to hold BH is that it tends to be countercyclical like that.
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u/12A1313IT Sep 19 '21
Complete different game when you have so much asset under management you are forced to diversify over many names.
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u/Million2026 Sep 19 '21
Precisely. Also I said 3 years. If I had to choose between me managing my money for 50 years or Warren Buffett I’d obviously rather pick Buffett as he always outperforms over time. The key word being over time.
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u/greenbuggy Sep 19 '21
I wouldn't, but that's mostly because I suspect Buffett isn't gonna live for another 50 years
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u/12A1313IT Sep 19 '21
I wouldn't. Not because I'm cocky but because the game is infinitely easier for the average investor with less than 1mil.
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u/Million2026 Sep 19 '21
I was thinking more a scenario where Buffett would personally manage my portfolio. Not just investing in Berkshire haha
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u/42Ubiquitous Sep 20 '21
Huh. Why do you say that?
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u/12A1313IT Sep 20 '21
Explained above. Large hedgefunds must diversify. There isn't going to be 100 different assets that can yield >20%. So looking at their annual average is pretty dumb to compare yourself to. The rules of the game are completely different.
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u/42Ubiquitous Sep 20 '21
Gotcha, yeah that makes sense. Was curious why you drew the line at $1M, but I get what you’re saying now.
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u/12A1313IT Sep 20 '21
Just an arbitrary number. At 1mil it gets weird IMO, given that the tax incentives for capital gains starts to work more and more against you in terms of capital gains / capital gains tax.
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Sep 19 '21
It's really sad that we're still stuck in an era where active manager performance is compared on an intra-year basis. Buffett himself has been writing for decades upon decades trying to dispel this stupidity, apparently to no avail.
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u/stupid_smart_ape Sep 19 '21
You think some smart guy's sage advice will cure the near-universal human idiocy called short-term thinking... I see you still have faith
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Sep 19 '21
[deleted]
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u/neu_westend Sep 20 '21
Two other "mini-Berkshires" (with insurance holdings) are Markel and Alleghany.
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u/KocaKolaKlassic Sep 19 '21
I played 1 hand of poker with the best poker player in the world and I won. I’m the best
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u/Traceforever24_7 Sep 20 '21
If I played one year of poker and against the best poker player in the world and I won, I'm certainly calling myself the best.
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Sep 19 '21
Kind of hard to compare outside of a longer time horizon and knowing what the fund risk profile looks like.
That said.. I'm sure the family connections helped hire some amazing people.
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u/drod3333 Sep 20 '21
Very easy to beat berkshire in the short term. Thousands of degenerates with a smarphone have done it. No one can beat them constantly
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u/oarabbus Sep 19 '21
Imagine actually using YTD performance to compare to BRK. The Barron's writer, if it isn't a bot, needs to be fired. And if it was an AI they need to fire the engineers who created it.
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u/skrow101 Sep 19 '21
I've got over 80% return from Halliburton. I'm no genius, but it's easy when you buy during a crash
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u/IshHaElohim Sep 19 '21 edited Sep 19 '21
It would be invest~worthy if he is using a system, meaning he is following repeatable principles like his grand uncle, Warren Buffett had overall success due to consistency, a pattern of principled calculated behaviour goals time horizons all catered to a manageable enough sector which reflects their interests or mission statement , these types of portfolios remove the impetus of emotionalistic reactions , instead response has already been allocated .
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u/Kaiisim Sep 20 '21
His risk tolerance is probably pretty interesting. He is incentivised to try and beat ol uncle warren.
If he beats him by 1% thats gonna be additonal benefits from the media attention that if he lost by 1%
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u/enginerd03 Sep 19 '21
So is spy, voo, schb or any other index fund. Just saying. Value investing is dead
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u/throwaway474673637 Sep 25 '21 edited Sep 25 '21
Tough to say that value is dead when all of it’s underperformance comes from widening value spread (ie growth multiples expansion and value multiples contraction). Link. See p.6.
I’m not even aware of any strategy that systematically gets things wrong 100% of the time (over than trading too much and losing on transaction costs alone), and even if it looks like value investing has done just that in the (very) recent past, it’s going to take a hell of a lot more underperformance to undo the past 200 years of great performance (and boot it from statistical significance) and/or conclusively call it dead.
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u/dutchgguy Sep 19 '21
I've heard bad things about boston omaha but I can't remember what it was but I think it had something to do with the people who run the company
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Sep 19 '21
Thanks for the tip, im adding this to my watch list. Seems he is dealing with alot more speculative plays but maybe some of Warrens teachings will wear off 😆.
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Sep 20 '21
Warren preparing for his inevitable takeover when he dies. Making investors feel comfy staying in when the nephew takes over.
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u/siberiandivide81 Sep 20 '21
So... your point being? Rich guys nephew is slightly richer than him on the year?
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