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Author: Hohum777 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8770  
Subject: Re: please critique my simple-minded... Date: 1/21/2011 3:31 AM
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(1) I fill each $5,000 Roth with a single stock purchase each year (so only one $8 fee)

(2) the dividends are automatically re-invested in the stock from which they were paid with no trading fee involved (I get more shares with no fees

I know that the conventional wisdom is to not put too much of your portfolio into single stocks but Berkshire Hathaway offers a lot of diversity in a single stock. Plus, my 401K investments (Fidelity index funds) give my portfolio a pretty good measure of diversity.


Seems penny wise, pound foolish.

1. What happens if one or both stocks were purchased at recent or 52-week highs?

2. What happens if one or both stocks plunge 30% - 50% within a 6-month period?
2a. Couldn't happen to Berkshire? Wrong.
http://finance.yahoo.com/q/bc?s=BRK-B&t=5y&l=on&...

I sincerely doubt even Warren Buffett buys an individual stock position as a single transaction, and
decides he's done. I know positions like Coke, Proctor & Gamble, Johnson & Johnson, etc were
multiple purchase transactions. Just the transactional execution of say, buying 1M shares of stock X,
would likely not occur as a single transaction.
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