It’s been staring me in the face. I first bought Berkshire Hathaway (of WB’s fame and B share of course) in 2010 in order to attend the shareholders’ meeting in Omaha in person. That was still one of my most memorable experiences.
Not longer after attending the meeting, I sold the shares. This was due to the quarterly custodian fee which didn’t make sense for a small investment.
We are in 2020 now. And I have been re-reading some books on WB (Snowball, Buffett etc) as well as some other books on him which I have missed out in the past. I have also been reading Berkshire’s annual reports. I have only read his letters to shareholders in the past.
It just clicked. I am looking to diversify my portfolio and Singapore listed companies are just not enough to capture the growth and diversity of the global economy. I need to look out but where? USA definitely. China of course. I am not so taken with Europe or other emerging markets like LATAM, India, Russia etc.
For US stocks, I am wary of the 30% withholding tax on dividend. I had previous experience with Exxon and it wasn’t fun paying the US government. What attracted me to Berkshire is that it has not paid a dividend since 1967. It has also been buying back its shares in the past 2 years. USD 12 Billion worth! I also like its approach of retaining earnings (100%) as long as it can compound it at a higher rate. This neatly takes care of the withholding tax issue as well as my portfolio’s need for growth.
Given its massive size (USD 500 Billion), I am not expecting huge growth. I am happy to see 10% annual growth. Let it compound for 30-40 years and it will truly SNOWBALL.