Stock Market and Real Estate Return in 2016: A Comparison


#103

No need to forecast. So long the leadership is ok, is a good investment. We are not as smart nor as wise nor as knowledgeable but we get to choose who we believe in :slight_smile:


#104

You are mainly telling this based on AAPL. we can not put 100% on AAPL or AMZN or GOOGL, but diversify it. In addition, we have seen many times AAPL or AMZN dips heavily.

For example, if I compare AAPL vs BRKB. Last five years, BRKB is far better than AAPL. But, 10 years are above holding, AAPL beats at big margin.

**Supposing I say this: **

We have $15000 and where will we put the money and hold for 5 to 10 years time frame so that you get max return?

Exactly similar question is posted in reddit today


#105

Those two questions are different:

Choose 5 stocks to hold them forever:
Answer: I had answered this question countless time. S&P 500 index fund. No stock is worth holding forever.

Max return in 5-10 years time:
Answer: Very hard because you need growth and high possibility of still around i.e. not go insolvent.
Maximize chance of being around = WB’s type of company i.e. Strong moat, survive an idiot CEO, minimum R&D, can’t do without products/ services, etc.
Maximize chance of return = Growth business which is opposite to WB’s type.
Want to have the cake and eat it too !!! Only one choice? I will choose AAPL, no doubt.
What is your choice (s)?

In any case, I have thought through all these blah, blah, blah… AAPL, Index fund, RE, some dividend stocks + play money. You would notice I don’t believe in bonds & debentures :slight_smile:


#106

Dividend stocks (hardly trade them, less than 5% of overall portfolio):
BRK/B
BHP & CAT - Metals
POT & DE - Agriculture
CVX & OXY - Oil
AEP, DUK, PCG - Electric utilities
AWK, AWR - Water utilities
T, VZ - Telecom utilities
RSG, WM - Waste Management
JNJ, OHI - Healthcare
PG, KMB, CLX - Consumer Staples

Main criteria is that they are unlikely to go bankrupt, acquired is ok, temporarily severely down is ok.


#107

Here also we can be choose, for a longer term, BRKB beats SPY. Check with 1Y, 2Y,5Y,10Y and much longer, the longer we hold BRKB, higher gap over SPY as Warren Team is working behind it !

In short, BRKB beats SPY with wider margin over a long period. BRKB is invest and forget stock !

Pros and Cons discussed here.

Two other Mutual funds such as SGIIX and SGENX grew at 13.39% YOY since 1975. Now, they are not.


#108

Watch the Bain and Company videos on Founder’s Mindset. They are on YouTube. They touch on the profit growth and stock return of companies that meet the criteria. Only a small percent of companies grow profits for 10 straight years. 85% of those that fail site internal issues as the obstacles preventing it. Also, companies led by founders outperform the S&P 500. It’s pretty interesting.

If you look at the stocks people on here love, quite a few are led by the founder.


#109

It makes sense because founders are more likely to have good vision. They also have a lot of passion to grow the business since it is their own baby. They will outperform for sure. I own goog, bidu, baba, tsla, fb, yelp, all led by founders. The major exception is aapl… :slight_smile:


#110

Sometimes industry change, they’re still fossilized in their original vision e.g. Yahoo! Jerry Yang, Black Berry Jim Balsille & Mike Lazardis.


#111

But then Jerry Yang made a good investment into Alibaba, so not all was lost. I think people are over fixated on his failures rather than looking at his achievements. If I had invested in yahoo back in 1996 I would have been happy.


#112

That’s because he couldn’t divorce from Yahoo!.. he is not running Yahoo! and had wisely moved away from Yahoo! but he didn’t do enough to divorce himself from it… he should have resigned from the board ages ago… give whatever reason like personal imperative, may be say he needs to be more time with his family, that he can’t sit on the board or run as CEO when Yahoo! days are obviously over.


#113

If he had resigned from the board, he would not have been able to make the Alibaba investment though. Then in that case it would really have been a lot uglier…


#114

Well, in that case, he is imprisoned… he is fossilized in his original vision :joy:


#115

2017 looks to be another very good year vs RE.
Investing stocks is the best as you do absolutely nothing, collect dividends and watch them appreciates.


#116

Very interesting setup, can you share some details.


#117

With today’s jump, so far, my jump in IRBT is around 40%. This is almost equal to AAPL jump this year.


#118

First Quarter 2017 update:

S&P 500: 6.5% gain
NASDAQ: 12.3% gain
My Stocks: 18.9% gain
My Real Estate: 9.0% gain
My Net Worth: 16.3% gain

This was a crazy quarter. I would’ve been happy to achieve such figures in one year, let alone one quarter!!!

That said, I have no idea what the rest of 2017 is going to bring…


#119

Embarrassing result given that you view yourself as an investment marvel.
AAPL: 32.6% gain
My stocks: 30% gain


#120

You are too heavily tied with AAPL. When aapl goes way up like last quarter, you’re doing well. However, if aapl hadn’t done well like the last couple years before, you suffered.


#121

I have the same problem, but my AAPL holding is less concentrated than yours.


#122

Coming from an investor advocating concentrated investment?
End date May 20, 2017
Start date…Return
May 17, 1997…31.65% (betting on the return of SJ might save Apple & more)
May 18, 2002…34.45% (iPod was the first big success that indicate Apple may be on a growth path)
May 19, 2007…25.48% (betting on iPhone is a big winner)
May 19, 2012…15.00% (thinking that TC is proven to be the right choice)
May 23, 2015…7.30% (betting on Apple Watch)
May 21, 2016…60.40% (betting on Trump)
No calculator for DCA purchase investment scheme :slight_smile:

Historical return of S&P 7-11% (no margin or options)
Historical return of SV’s RE 6-8% (no leverage)

The choice is obvious.