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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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…
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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...
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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...
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dublinaam said:
Are you able to do a comparison between the tax of Berkshire versus a ETF?
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In very simple terms it's CGT @ 33% (less allowances/previously incurred losses) versus exit/8 yearly deemed disposal tax @ 41% (for ETFs subject to that tax treatment).
 
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.
 
conor_mc said:
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
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Stocks, cash, and the core BH businesses? Or just the first two?
 
MrEarl said:
What premium do you think is built into the value of BH, to reflect Warren Buffet's involvement?
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The WB premium could actually be a deficit...

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
 
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.
 

but that was back in 2017 when Berkshire stock was trading at a much smaller premium and when Buffet I think was using cash to buy back Berkshire stock because he then considered buy backs to be best use of cash , he ain't doing that now though he is just leaving it all in cash, he has been bearish for ages aswell even back then he thought stocks (US ) were expensive. He also got covid very wrong selling out of airlines and oil companies during the covid crash at a loss and missing out on huge rebound.

The main issue for international investors is the exposure to US markets and US dollar, very little international, he is really just focussed on his US client base and the oul codgers that go to his AGMs I think, once their holdings in US dollar terms don't have a big fall he is happy which explains his huge holdings in cash and risk adversion, surely a younger Buffett would have been making bigger forays into international markets where the value is .
 
Isn't this thread at odds with the posting guidelines?

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Corola said:
Isn't this thread at odds with the posting guidelines?
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If you think it is then you should use the "Report" facility to flag it to the moderators.
Note that neither my first post (split from another thread by @Brendan Burgess) nor any of my subsequent posts involve speculation about future performance of BH.
I'm merely discussing technical issues regarding its asset allocation mix which is allowed under the posting guidelines as far as I'm aware.
 
I'd have thought that in the short term at least,the demise of Buffett would see a significant pullback, Berkshire Hathaway is in many ways a bet on Apple
 
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