Berkshire Hathaway as an alternative to an ETF?

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ClubMan

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Some index tracking ETFs and unit linked funds do what you're talking about but the charges and taxation are much worse compared to direct equity investments. @Brendan Burgess has already explained why direct equity investment might be a better idea in this case. If you're worried about investing in one or two shares then maybe consider large diversified conglomerates like Berkshire Hathaway and similar companies. For example, if you invest in BH then this is the sort of thing that you get:

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www.mymoneyblog.com

Berkshire Hathaway Asset Allocation: What’s Inside a Share of BRK.B?

Whether you are a Berkshire Hathaway shareholder or just curious about what Warren Buffett’s “masterpiece” looks like today, here is an interesting graphic from Sherwood News. Ess…
www.mymoneyblog.com www.mymoneyblog.com
Other comparable conglomerate companies would offer similar asset allocation diversification.
 

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Very interesting.

So you have 39% of your investments in unquoted companies such as insurance companies and railroads.
29% in cash waiting to pounce on the next investment opportunity
9% in Apple
4% in Bank of America
4% in Amex
3% in Coca Cola
12% in other quoted shares
 
Just for context, my post above was split out from this thread:

What to do now that I am mortgage free?

Just turned 37, mortgage free with couple of years. Have all the outside of house now finished so no more big bills. I am currently maxing out my avcs for my age and have over 100k in dc pot alongside DB care pension pot at current rates would give me 55k a year including state pension. I tend...
www.askaboutmoney.com
Similar information on BH's asset holdings is available here:

List of assets owned by Berkshire Hathaway - Wikipedia

en.wikipedia.org en.wikipedia.org
Also, this issue has cropped up before, e.g.:

Berkshire Hathaway as an alternative to an ETF?

I think it has been mentioned before that Berkshire Hathaway is a good alternative, as there is no deemed disposal, and we are only taxed when we sell. However, this stock being a conglomerate gives far more diversification than a run of the mill stand alone stock. Are there any better...
www.askaboutmoney.com
 
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Hello,

What premium do you think is built into the value of BH, to reflect Warren Buffet's involvement?

Or, to put it another way, how much do you think the value of BH will drop, if and when the Sage passes away?

I really rate the man btw, so don't wish him ill, but he's gotta be getting close to the finish line, at this stage and I think some of the loyal following who have invested in him, may exit, if he leaves us, or investors won't value BH at such a premium, without him.
 
Price-to-book value is about 1.6 currently, so a 40%-odd downside compared to just owning the stocks/cash in the exact same proportions yourself. Given their cash pile and the elevated price of stocks, if you believe stocks are due a correction and that BH even without Buffett would still pick some winners from the carnage, it’s not a bad bet that they’ll bounce back from the inevitable sad news day.

I think the bigger bet is not so much whether there’s a sustained post-Buffett BH sell-off but rather whether there’s an overall market sell-off sooner rather than later.
 
MrEarl said:
What premium do you think is built into the value of BH, to reflect Warren Buffet's involvement?
Click to expand...
The WB premium could actually be a deficit...
rationalwalk.com

In Search of the Buffett Premium

Some thoughts on Berkshire Hathaway’s long term future twelve years after writing a comprehensive report on the company.
rationalwalk.com rationalwalk.com
“If I died tonight, I think the stock would go up tomorrow. And there’d be speculation about break ups and all that sort of thing. So, it would be a good Wall Street story that, you know, this guy that’s obstructed breaking up something that — where some of the parts might sell for more than the whole. They wouldn’t necessarily be — probably be worth less than the whole — but might sell for — temporarily — for more than the whole. And it would happen. So I would bet in that direction.”

— Warren Buffett, 2017 Berkshire Hathaway Annual Meeting
Click to expand...
 
Having any sizeable proportion of your wealth in one stock is taking on a humongous risk.

Id prefer the increased diversification that’s available via the gross roll up regime rather than invest in individual shares. If you’re already paying tax at the 52% rate then gross roll up isn’t so bad.
 
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