Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (25) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: rationalwalk Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 214562  
Subject: Re: 40% Overvalued Date: 10/9/2012 10:17 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 5
If the only thing you could buy were SPY, you'd be right; I'd sit on
cash and wait for a great entry point.


This is unfortunately a major issue facing the vast majority of passive investors who intelligently choose to index rather than to pick stocks without investing the required time and work. Obviously, these people could choose an active strategy and delegate management to someone with a proven track record ... however, it is also not easy to pick a successful manager.

Would it be insane for a passive investor to allocate a large percentage of US equity exposure to Berkshire? In some ways, it might be if the individual doesn't have sufficient personal understanding of Berkshire to avoid panic in a bear market and is unwilling to learn about the business. But for someone who wants a relatively passive strategy and is willing to invest maybe 10-20 hours per year following Berkshire, this could be a superior approach. I really don't think it takes much more than 10-20 hours per year to keep up with Berkshire at a level sufficient to be intellectually armed against panic selling during a bear market.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (25) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Dividend Growth Investing

Good Time for Dividend Champions?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement