At one point down -1,600. I did a little buying today (BRK.B), this was margin calls, algo trading, and fear.
I just sold my entire portfolio (apart from retirement funds) earlier this morning, as we want to buy a house later in the year and don't want to get trapped if the stock market completely crashes.
Far better to hold steady.
It does require a good exit strategy for whatever hedge you choose.
I was thinking of buying VIX on Friday, and am kicking myself for missing out now.
[1] https://sixfigureinvesting.com/2015/10/how-does-tvix-work/
I'm hoping for a much bigger sell-off so I can pick up some more below $150.
It's not like putting all of your money on Tesla, but it's still riskier than a mutual fund.
The value of BRK stock is the net present value of Berkshire's existing holdings, plus perhaps a small and diminishing premium for the convenience of holding stock at the moment of Buffett's future sale and acquisition choices. Because Berkshire is fairly hands-off in terms of managing their holdings, and because its investments have fairly low volatility, in the short-term the stock price should hold steady upon Buffett's exit.
Thus, if owning BRK made sense 10 years ago, then it makes sense to own it until the very last day that Buffett[1] controls the company, and even afterward to the extent the pipeline is filled with his choices.
But maybe I'm misunderstanding something about market dynamics related to how end games play out.
[1] Presuming that Buffett remains Buffet, in control of his faculties and in particular his prescience.
Because I have a good grasp of what it's actual intrinsic value is, I can wait to buy more until it's cheap which increases my long term returns. That's much harder to do with an index fund, indexes don't get as cheap as BRK gets, and tend to remain overpriced. For example, 15 PE used to be considered a fairly priced stock market, but for the last 20 years or so the market has mostly been much higher than that.
That's somewhat comical given that he's 87 years old. Life expectancy tables show an expectancy of 5 years. Probably should cut that back a fair bit given his taste for Coca Cola, See's Candies, and burgers....
All that said, given the nature of his business and the strength of those in succession behind him, hopefully Berkshire continues to do well.
So that's not much of a risk at all.
But in this instance, the single stock is a holding company that is already diversified across several industries. Anything that would negatively impact Berkshire Hathaway to a greater extent than the market as a whole is likely to be the product of intentional malice. As it is now, it's akin to an extremely actively managed mutual fund, in that they generally have at least one seat on the board--or at least VIP seats at the shareholder meeting--for anything they invest in.