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Old 11-26-2011, 10:28 AM   #41
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My wife is retired and I'm very close - maybe 6 months. I realized some time ago that I don't handle market volatility very well at all - totally stresses me out, will literally ruin my day. So to deal with this, first I limit looking at the market to a weekly glance rather than daily. I've built up enough cash to cover 3 years of living expenses; just sits in the bank, earning close to nothing. Then I have another 4 years in only 20% Equities. The rest is 50/50. I am much more relaxed and we are debt-free too which is very freeing.
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Old 11-26-2011, 02:31 PM   #42
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Originally Posted by arebelspy View Post
Read an article from a site I subscribe a week or two ago to making a compelling case to do the same thing.
Using Options To Go Long Berkshire Hathaway | LIVING OFF DIVIDENDS & PASSIVE INCOME
Sorry, missed this first time through. Thanks for the link. I should give credit to ClifP for also suggesting this idea.

The blogger makes an excellent case, and he does point out that it's way too easy to overdo it.

Buffett's already put in a floor at $66/share. The "worst nightmare" is if he or Charlie unexpectedly passes away. (At their ages I doubt that it's very "unexpected".) And if that's what caused shares to dip 20%-30% then I'd buy on margin.

But, damn, now everyone's going to start selling naked puts on Berkshire!

No problem. I think the market's going to drop plenty over the next few months, and it'll just be a great opportunity.
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Old 11-26-2011, 03:32 PM   #43
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Live off a pension. Most of assets are in CDs. Last year I started fully funding a Roth in Vanguard Star, and will in foreseeable future as I will make enough part time money to fund this. Started making maximum contributions to I Bonds. Began last year dollar cost averaging several hundred bucks two years ago into Vanguard Total Stock. Kind of an odd ball. One of a few people who borrowed his way to retirement (bought expensive service years) and is saving for retirement after being retired.
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Old 11-26-2011, 06:15 PM   #44
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When did you sell those calls? Every time I check DVY call prices they seem to be hardly worth the commission, let alone the risk of being called away...
Part of the FIDO beauty is no commission except to sell the call.
Most of my purchases were in August in the $46-47 area.
My average call premium is about $80-90 which works out to about 22% annually. If called away I would have a ~10% gain on the stock which isn't that painful. Again no commission if called. Much of my stash was purchased in 10-20 share increments (only feasible with no commission) which prevents making the "big" timing mistake.
Lots of work for small returns, but hey, it's 2011.
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Old 11-26-2011, 08:26 PM   #45
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My average call premium is about $80-90 which works out to about 22% annually.
Lots of work for small returns, but hey, it's 2011.
I've been targeting $250/contract or more on Berkshire Hathaway and a small-cap value ETF (IJS).

Guess I need to lower my crosshairs a tad more and shoot more often...
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Old 11-26-2011, 09:17 PM   #46
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We are still in the accumulation phase. Current allocation is about 65/35 and our continued semi-monthly purchases are at about the same ratio.
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Old 11-27-2011, 03:12 AM   #47
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Buffett's already put in a floor at $66/share. The "worst nightmare" is if he or Charlie unexpectedly passes away. (At their ages I doubt that it's very "unexpected".) And if that's what caused shares to dip 20%-30% then I'd buy on margin.
Isn't $66 a floor only to protect against a 20-30% dip upon Buffet or Charlie's death?

If Buffet finds other opportunities more attractive if the market drops plenty over the next few months, I assume he'll let BRK.B go below $66.

(I'm interested below $70 and margin interested below $60.)
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Old 11-27-2011, 09:35 AM   #48
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Work part time. 80% CD ladder. 20% stocks, most all high div utility + covered option with a little brkb and mo sprinkled in.

No change in plans and the up/down kind of helps with the current process.
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Old 11-27-2011, 09:58 AM   #49
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For the record, I'm 56...retired about a year...NO pension. I've been quite conservative on the investment front over the years, but have been buying a bit over the last 2 or 3 months. I'm currently at about 25% equities...75% fixed, but have an eventual equity target of 35-40%. Perhaps a bit higher should things get really cheap.

Your feedback is very much appreciated. Thanks!
I would sit with the AA you have now and see how you handle the current market. What is your current track record with the 25%? My max limit is 20% and even then if at the end of the year the return was less than the other 80% then I am not good at it and (savings/bonds + interest) wins.
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Old 11-27-2011, 11:14 AM   #50
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Isn't $66 a floor only to protect against a 20-30% dip upon Buffet or Charlie's death?
If Buffet finds other opportunities more attractive if the market drops plenty over the next few months, I assume he'll let BRK.B go below $66.
(I'm interested below $70 and margin interested below $60.)
I was just using jargon about Berkshire's filing that they'll buy back shares when the stock price drops to within 10% of book value.

Whether Berkshire's buying will be enough to support the stock price is another issue. I don't know enough about the buyback process to know if Berkshire's obligated to disclose their trades as they buy or if they can just submit the usual quarterly filing well after the fact. But I'm pretty sure that a number of analysts and professional investors have fired up their book-value calculators and are watching Berkshire trading volume like a hawk.

I'm trying to imagine an opportunity more attractive to Buffett than buying back his own stock. If there's a time when he crosses from cold-hearted financial analysis to emotional investor psychology, it's when someone wants to be paid in Berkshire stock. I don't know if he'll ever get as excited about some future company as he was about BNSF.
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Old 11-27-2011, 02:54 PM   #51
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Retired over 4 years, early 60's, my pension with medical deducted covers all my expenses (paid off mortgage 17 months ago) and I bank on average $850-900 a month... I live very frugally. I have almost no cash since what I save each month eventually goes to pay for LTC, fuel oil, firewood, property taxes and I just had to buy a used car to replace my old one and that really knocked me down to almost nothing. I was 35/65 but smelled blood in the water back in the summer and I have been buying on dips. I'm up to 65/35 which probably is too aggressive for my risk tolerance but I lost so much in 2008 thru 2010 I am trying to earn some of it back.
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Old 11-27-2011, 04:12 PM   #52
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Still working, hoping to ER Jan/Feb or at least take a long break.

We have two teenagers 17 & 15. In July we moved the oldest childs 529 into cash, left the other one as is. We didn't want to lose any money for college next year.

I haven't changed anything else - just plugging along as usual.

Trying to figure out how to invest if we actually sell our business.
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Old 11-27-2011, 05:30 PM   #53
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I have roughly ten years vested into a state pension plan. I think my state is one of the few that has managed their pension well. I have no concerns about it. I max my Roth IRA and put $500 a month into my 401k anyway.

If I continue to work for the government then I will be able to retire in twenty years at age 55. The pension and social security will be all that I need. Actually social security alone would probably be enough for me. My living expenses, excluding taxes, are around $24k per year.

I would like to ESR before 55. My taxable account is 100% stocks, outside of emergency cash. I would like to generate around $15k from my taxable portfolio and then work enough to generate about the same amount of money. My taxable portfolio will probably throw off around $5k in dividends this year.
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Old 11-29-2011, 12:40 PM   #54
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I am adding to my equity position. Granted, my equity allocation is still quite low (around 33%).
ditto
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