If Berkshire Hathaway was a Mutual Fund..

[Bailing-Bob]

If BRK.A was a mutual fund what category would if fall into. Large Growth, Value...etc?
Would it be a sector fund?

 

[Spanky]

Large value?

 

[Nords]

If BRK.A was a mutual fund what category would if fall into. Large Growth, Value...etc?
Would it be a sector fund?

Well, its $165B market cap is the equivalent of the industry's 10th-largest mutual fund. That'd be one hellacious sector, but you'd have to read the individual breakdowns on the annual report to decide what sector.

Looks like out of last year's $98B of revenue insurance did $28B, McLane almost $26B (at a razor-thin profit margin), and "other" was $21B. I don't know what sectors those fit into , if any.

Large value?

I've seen more opinions for large growth. Yeah, Buffett doesn't overpay, but he also doesn't buy into cigar-butt or turnaround situations anymore. It's more of a fair price for unrecognized growth or brand-franchise potential.

I think, too, that Berkshire's deep bench of insurance analysts has come up with a number of ways to value different industries & businesses, and I think Buffett spends a lot of time thinking & tweaking those methods. If you watch Buffett discuss an industry or a company he's completely familiar with the details of just about every industry and its top companies-- and he's totally unrehearsed. Or else he'll tell you that he can't understand it.

Contrast that with the Danahers, who sweep into an acquisition and completely tear it apart overhaul it with new management and their operations "system". Or Eddie Lampert, who's doing heaven knows what with KMart & Sears, two companies whose sales can't seem to get out of deep-value territory.

 

[Bailing-Bob]

Well, its $165B market cap is the equivalent of the industry's 10th-largest mutual fund. That'd be one hellacious sector, but you'd have to read the individual breakdowns on the annual report to decide what sector.

Nords,

You have about 30% of your portfolio invested in BRK.A. If those funds were not invested there, what index mutual fund(s) would you deploy into?

 

[macdaddy]

I didn't want to start a new thread to ask this Q and it seems sort of related. Does anybody know of a decent Fidelity no fee mutual fund for international exposure? What about for US REITs? I need to start a new account and wanted to put 50% into FFIDX (when it dips) and 25% into each of those other two sectors.

 

[clifp]

Fidelity Spartan International Index, tracks the EAFE index, which is basically large cap, developed countries. M* gives it 4 stars, and an analyst pick, ER is .10% which I think is as low as any international fund or ETF, out there.

 

[clifp]

As far as Berkshire goes, it is an insurance company and Large Cap Blend mutual fund. Of course, I think value and growth stocks have practically flip flopped, Intel, Microsoft, and Walmart are all held by many value funds, and six or seven years ago these would all be growth stocks.

 

[Nords]

You have about 30% of your portfolio invested in BRK.A. If those funds were not invested there, what index mutual fund(s) would you deploy into?

Spouse and I have been talking a lot about life after Buffett.

We'd continue with Berkshire Hathaway if Howard Buffett and the board preserved the culture-- especially the part about not messing with the management. It'd be interesting to see "Ajit Jain Unleashed" too.

So if a company of that culture wasn't available then we'd just split its allocation among the remainder of the portfolio-- about 30% small-cap value (IJS), 30% international (PID), and 30% blue-chip dividends (DVY). DVY will be the next buy if Berkshire's allocation starts getting itself into the mid-30s.

Of course, I think value and growth stocks have practically flip flopped, Intel, Microsoft, and Walmart are all held by many value funds, and six or seven years ago these would all be growth stocks.

That's because they've all spent the last seven years growing in a different and highly undesirable direction...

 

[chinaco]

It would not highly diversified. BH owns a handful of companies' stock and outright ownership of several more. The concentration has helped with growth (in a value oriented way).

He is a great investment manager and investment/company/stock picker.