If I had to bet all my savings on one stock, I would bet on this one!

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Now that I have your attention, never ever do that! That’s some terrible advice!  Betting your savings on one company is never a wise investment strategy.  Diversification is the key.  Spread your risk.  Think Enron, AIG, GM.., in case you’ve been living under a rock, they all tanked!

But to make up an interesting read, let’s say I had to pick one and only one stock, I have one such stock in mind.  First, let’s look at the numbers.  Opinions are passe.

Market Cap201.20B
Performance Till Date (till 2009)434,057%
Years In Operation46
Outperformed the S&P 50038 times
Trailed the S&P 5007 times

Anyone can make money in a bull market, what about the performance during bear markets? Glad you asked!

Performance During Bear Market Years (Annual Percentage Change)

 
S&P 500 (%)
Mystery Company (%)
1966-11.720.3
1973-14.84.7
1974-26.45.5
1977-7.431.9
1981-5.031.4
1990-3.17.4
2000-9.16.5
2001-11.9-6.2
2002-22.110.0
2008-37.0-9.6

Performance When Trailing The S&P 500 (Annual Percentage Change)

 
S&P 500 (%)
Mystery Company (%)
196730.911.0
197537.221.9
198032.319.3
199921.00.5
200328.721.0
200410.910.5
200926.519.8

Those are some impressive numbers. There aren’t too many companies that can boast such returns and if you are an informed investor, you probably know which company I’m talking about.

Berkshire Hathaway.

This company is run by the most modest man in the world – Warren Buffett. It is hard to find a more humble person who happens to be one of the richest in the world. He still lives in a house in Omaha, he purchased for $31,500.

What does Berkshire Hathaway do?
Berkshire Hathaway is more similar to an actively managed mutual fund company than a traditional one. Berkshire is a holding company of a variety of companies handpicked by Buffett and his partner Charles Munger. Yet, unlike mutual companies, Berkshire Hathaway buys up so much stock in a company that they have a say in all strategic decisions the company makes. Buffett can influence the direction a company takes which is not true with mutual fund managers.

What’s Wall Street’s opinion on Berkshire Hathaway? According to Bloomberg, bond investors consider Berkshire Hathaway notes safer than US government bonds! That’s like saying they have more faith in Berkshire Hathaway than the US government on a loan default!

So what’s the catch?

  • For one, the top 2 people who run Berkshire Hathaway are aging. Buffet is 79, Munger is 86.
  • Berkshire Hathaway is huge. It may not be able to give the same returns investors are used to
  • If you like to bet on technology stocks, Berkshire Hathaway is a bad choice. Buffett is known for his aversion to tech stocks
  • The current market can trip even the best of managers
  • The price on 1 share of BRK.A is $121,987! And will most likely never split. (You still can get in on the gravy train by getting its sibling brk.b which trades at around $82)

If Buffett became the world’s third richest man working the market, he knows something that others don’t. I would pick Buffett over any other money manager considering Buffett’s performance record. So if I had to bet my savings on one stock, I would pick BRK.B (I can’t afford BRK.A, yet)

6 thoughts on “If I had to bet all my savings on one stock, I would bet on this one!

  1. If I had to bet all my savings on one stock, I would bet on this one! http://bte.tc/bcCg #RTW

  2. If I had to bet all my savings on one stock, I would bet on this one! http://bte.tc/bcCg #RTW

  3. If I had to bet all my savings on one stock, I would bet on this one! http://bte.tc/bcCg #RTW

  4. As we all know, due diligence is a must, especially today, as we are going through an Economic Crisis that boggles the mind as to money supply contraction, rolled over and expanded debt obligations, serious unemployment, everyday consumer price inflation and asset value deflation.

    We need to help inform each other how to research, discover and share with each other all the dealers out there that are non-disclosing, that are manipulative deceivers. Please help us help you in your pressing decisions regarding when, what and how.

    As you know, there are core, not “fiat” major assets to own and hold during such a Crisis. Investment Grade Diamonds, Real Estate and Gold Bullion, Silver.

    I have been researching where to buy and hold Gold and Silver Bullion, from Dealers that are free, clear and unencumbered with full and honest disclosure about all of the Dealers who have negative legal history, massaged financial history, false storage guarantees, poor and/or no audit history, unfair costs, large unearned commissions that are not disclosed from all of the websites of those Dealers who claim that they are solid Gold and Silver Bullion Providers.

    Amongst most of those Market Makers, Gold Dealers, Bullion Banks I was shocked most by one website that I found that had such a large litigation history that I could not believe they still existed. Rated “D” by Better Business Bureau.

    This Entity still is operating but never discloses, as required, this negative history. I assume that is why they are still doing business in the Precious Metal’s Sector.

    That Entity is Monex Gold Depository Company located in Newport Beach, CA.

    I compared MonexGold to GoldMoney in London, Zurich and HongKong for direct purchases of Gold and Silver Bullion. GoldMoney buys directly from Gold Bullion Refiners….not from the major Gold Bullion Banks.

    What a difference between MonexGold and GoldMoney?

    As in any due diligence exploration to assure every best effort has been made so as to preserve, protect and defend our own purchasing power, as a hedge against printed “fiat” electronic printed paper money, it seems highly probable that real assets like Registered Diamonds, Real Estate and Gold are the only “real money” choices.

    Good Due Diligence can dig up a lot of shocking discoveries. Please, invest the time and share your findings so that we all can continue and discover the downsides “out there” by visiting and comparing GoldMoney against MonexGold’s website in Newport Beach, CA.

    What a massive difference in required disclosures and litigation history. Due diligence is a must in this economic environment.

    In these times, stay well and prosper.

    Jonathan
    .-= Monex´s last blog ..“Monex systematically underpaid their employees“ =-.

  5. It is important to remember that past results do not guarantee future performance. I have a feeling this will be the case with Berkshire. The entire company was essentially built around Warren Buffett. He is already in his 80s, and cannot last that much longer. If you were to bet your life savings, do it only short the short term, as you can’t know where the company is going to go.

  6. I have to agree with you on if you had to invest in one stock Berkshire Hathaway would be it. My question would be why do it since you can get into some mutual funds for 250 and spread your risk.

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