The Last Three Greatest Positions in the World-Berkshire, Block, and Apple

     Okay, I am going to cover my final three positions from fourth to seventh highest weight in my portfolio, knowing that everything in my portfolio has a lot of weight. I am so concentrated in all my positions because I believe in all of them. I try to keep the number of companies I have a position in at nine or below. Beyond that, 4/7 of my positions are tech, with Costco, Berkshire, and Disney as the exceptions, so every position can make or break my day/portfolio. If you did not read the review of my first four positions five days ago, my top four positions in terms of weight are Costco (30% of portfolio, 80% gain), Disney (18% of portfolio, 6% gain, so much lower than when I did the review because of that earnings call), Microsoft (16% of portfolio, 134% gain), and TQQQ (10% of portfolio, 18% total gain, with the caveat that I have bought and sold out before.) Now, we get to stocks I have bought recently, which haven’t had a chance to mature or have had recent setbacks. With the exception of TQQQ, I have had all those positions for 3+ years.

     First up to the plate is Berkshire. Berkshire runs a bit counter to my perhaps overly aggressive portfolio. Berkshire was a stock I bought because I try to never have any cash in my portfolio (I have 15 cents of cash right now). I believed/still do believe that Berkshire is one of the most stable compounders in the market. Berkshire B has outperformed the S&P by about 900% since its inception on May 10, 1996, and 20% over the past 5 years. Few companies could outperform the S&P 500 consistently, even fewer that you feel 100% confident in at all moments and in every situation. Putting your money in Berkshire feels like putting your money into a bank that gives you compound interest of 20% every year. Truly, there are, in my mind, no companies safer. I put 10% of my portfolio into Berkshire, and it has yielded a 15% gain.

     To be honest, I initially put my money into Big Buffett’s company because I had too much cash on hand for my liking and thought it was a safe place to put my money as I perused other options, but I have been so happy with how little I have to worry about the company, that I think I am just going to keep my money there for a while, even after Buffett’s reign ends. Greg Abel is the man set to replace Buffett. Everything I have seen says that he is the right man for the job, and Buffett seems to be placing an increasing amount of confidence in him. I have been scarred by blue chip CEOs handing the reigns over to their successor before (ahem, Disney), but this doesn’t feel like that, and I am optimistic for the future of Berkshire.

     And some advice, when Buffett does eventually pass, whether that be five weeks from now, five years from now, or five decades from now, the company is going to feel unstable for a minute as the market re-appraises the company’s assets sin Buffett, and that is the moment you should definitely buy. Really, anytime is a good time to buy, but Buffett is good enough to set Berkshire to run without him, but investors won’t trust him enough, and I am not sure how long it will take them to believe in his vision, a month, a year, a half-decade, but eventually, they will see, and the stock will continue its compounding mission.

     Block is a company that I am tossing around in my mind, and boy am I trying to be rational, but they are making it difficult. Block is a company I am pretty sure is on a good path. I think they will be an Adobe-level company in five-to-seven years, but many have thought that before, charged into the dragon’s den with their money and being killed. Block’s revenue while its profitability has been growing as the company has increased its focus on efficiency and actually making money. For example, in 2023, gross profit jumped 25% while operating expenses only jumped 18%, giving the company a tidy profit of $10 million. The company has a stranglehold on merchants when it comes to Square products, Cash App continues to trail Venmo in terms of peer-to-peer use but is massively profitable and has implemented so many new uses into their service, investing, a credit card, cryptocurrency trading (which isn’t investing), etc. In yet, I still do not feel awesome about my position. I am going to buy more, but the general shadiness around Cash App, and how little regulation they implement on themselves leaves me worried. I think Jack Dorsey has minimized some of that, and somehow, he seems to be the adult in the room.

     I feel okay about Block as a company, and since I have a loss on the company right now (5%) and it’s only 9% of my portfolio, I am going to buy a little more, but out of all my companies, Block is the one I feel least confident about, but it feels right in almost every way.

     Finally, we have Apple. Apple is a great company with great products and great leadership, and they are going through a “what have you done for me lately moment.” Right now, Apple is doing something all companies who are supposedly buy-and-holds forever do: struggle. Netflix did it, Disney is doing it/did it to an extreme point, Microsoft famously did it, and the list goes on and on. Great companies face challenges eventually, and if leadership is good enough, (in Apple’s case) the result is that in five years people will think it insane that everyone was not buying Apple at $170. No, Apple is not an absolutely stellar company right now. They are not positioned especially well with AI, their Apple Vision Pro is not raking in rewards quite yet, and the iPhone still makes up 55% of their sales, which is worrying, because the iPhone is not doing spectacularly right now. I am a little worried about Apple; how could I not be? But I am also confident that they will work their way through this problem as they always have, and as great companies always do. Right now, Apple is 9% of my portfolio, and I have a 4% gain on my Apple.

     Those are my top seven overall, Costco (30% of portfolio, 80% gain), Disney (18%, 6%), Microsoft (16%, 134%), TQQQ (10%, 18%), Berkshire (10%, 15%), Block (9%, -4%), and Apple (9%, 4%). As I said, I like to keep my portfolio extremely concentrated, but I might add one more stock. Right now, I am looking at Adobe, Ferrari, ServiceNow, and QUAL.