And everyone else. 99.999% of the world.
Arrogant folks. (Me included)
Even if you say you don't think you're better than Warren Buffet, your actions indicate otherwise.
Walk into any room, and ask anyone. "Do you think you are a better investor than Warren Buffet?"
Who dares to raise their hands?
Probably nobody.
And yet, almost everyone believes they are.
Don't agree with me?
Ok, simply put, did you invest all your equity allocation into Berkshire Hathaway?
No?
(Note, I said equity allocation, cos maybe someone might want to allocate into real estate or bonds for whatever reason, etc.)
Heck, most people don't even own Berkshire shares!!
Ok then you think you're better than the guru himself.
Don't understand the logic behind it?
Berkshire Hathaway owns a diversified portfolio.
It is run by Warren Buffet.
Investing 100% of your equity money in it, means you trust Warren Buffet in his investment skills.
If you invest 99% in Berkshire, and 1% in something else.
Means you think your stock picking is better than Warren Buffet.
Think about it, most of us pick INDIVIDUAL STOCKS for our investment portfolio. *Roll eyes*
Really? You think your calculations are better than the guru?
If you buy your own shares, you are trusting your own stock picking skills.
When you buy Berkshire, or any other fund, you are trusting the manager's skill.
When you buy 50% Berkshire and 50% XYZ Unit Trust.
Means you think the manager of XYZ Unit Trust is better or as good as Warren Buffet.
Unless it is of a different asset class than what Berkshire invests in.
Think about it.
If you say you are a long term value investor, then you should be investing in Berkshire almost 100% of your equity portfolio, if not all of it.
You probably AREN'T a better value investor than Warren Buffet.
*Side note, there are other reasons not to invest in Berkshire.
One may want a larger bond portfolio, different asset allocation, different country/sector allocation, etc.
BUT this is something to keep in mind.
Some people don't care about country/sector/asset allocation. Some people might just want to invest in a good stock with a good manager.
And in all honesty, does country/sector/asset allocation matter? When an asset manager can make money, does one really care?
If my parents bought 1 share of Berkshire on the day I was born in 1982, $830, the price now after the coronavirus downturn is $267k. That's a 300x return. Over 37 years.
Who really cares about country/sector/asset allocation when we're looking returns at that level?
Think about it.
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