Annual Review Part Two

Part two of my annual look at all of the Real Money Portfolio holdings... including thoughts on Apple, Amazon, Berkshire, Facebook, Boston Omaha and Tiptree

By Travis Johnson, Stock Gumshoe, February 1, 2020


It’s time for part two of our Annual Review, this week I’m getting to a few of my largest holdings, including some that reported earnings recently and have had a big impact on the market.

In the big picture, we’ve seen what impact a surprise event like the viral epidemic in China can cause… and that could have more of an impact if it’s not contained in the next few weeks, but I don’t see why it should impact your view of the economy or the performance of most companies going forward.  The coronavirus outbreak will not change the world, but it might very well change the revenues of some companies that rely on Chinese consumers or on travel in the next six months… with the likelihood being very high that the stock market will overreact to that risk, particularly given the long bull market that gives people the urge to take profits at any sign of risk.

I expect that here in the US, the larger impact will be the political campaign as President Trump and his democratic challengers put impeachment behind them and start to campaign again, with the primaries leading the headlines — election years are usually great for the market, particularly when the President is running for reelection, but Wall Street has also gotten itself almost as worked up about the risk of Bernie Sanders or Elizabeth Warren as it was about the risk of Donald Trump four years ago.  Given that general tendency of strong election years and the likelihood that the Fed will AGAIN cut rates at some point this year if things stay as they are, I’m inclined to go into 2020 with a bias of looking more for buying opportunities, not selling opportunities.

And given my prognostication abilities when it comes to the market and the economy, that’s probably two paragraphs too many about those opinions… let’s move on to continuing my Annual Review of the companies I’m invested in right now and my current valuation thinking.   Starting with my largest investment.

Berkshire Hathaway (BRK-B) 11% position, average cost basis $109.   Nibble below $225, buy big below $211 (1.3X book), though there’s a good chance that book value per share will rise by several percent and bring that buy point up to $220 in a few weeks when they report, on February 21, or that big changes to the ...

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