2016 was mostly a good year for me and my family. I am grateful and looking forward for the next year, which will likely bring changes to my personal life, hopefully good ones.
Therefore, I continue to like the investment in both companies for the long term and don't mind that they ebb and flow. In 2016 I consolidated my investments on Interactive Brokers (IB) account. I also diversified - Alphabet + Berkshire went down from being 85% to 55% of my investments:
Since last update, I added (to) three positions: VRX, KORS and GILD. While I consider KORS and GILD as yet another regular value investments, Valeant is a different animal. I see a high chance of it doubling in a year or increasing five fold within next 5 years as it sells assets and reduces leverage. But there is also substantial chance of it dropping to zero or close to it, if some bad development gets amplified by their leverage. None of these two options apply to the other investments. As time permits, I will try to find more risky bets similar to VRX. I will try to keep my total exposure to such stocks modest (perhaps 20-30%), but spread out over more opportunities.
Investments
In 2015 GOOG(L) stock scored 40% gain, while BRK.B was ~15% down. In 2016, GOOG(L) has ~2% gain, while BRK.B went 23% up. My interpretation of market is that Ruth Porat's arrival was correctly anticipated to increase value of Google, and 2016 did not surprise markets as they saw it happening. On Berkshire, the level of undervaluation that existed throughout most of 2016 was borderline ridiculous for such a safe stock, and strong gains in late 2016 did only some part of catch up to the underlying value. Of course both stocks can drop in 2017, but I have hard time seeing how their intrinsic value could drop over next year.Therefore, I continue to like the investment in both companies for the long term and don't mind that they ebb and flow. In 2016 I consolidated my investments on Interactive Brokers (IB) account. I also diversified - Alphabet + Berkshire went down from being 85% to 55% of my investments:
Since last update, I added (to) three positions: VRX, KORS and GILD. While I consider KORS and GILD as yet another regular value investments, Valeant is a different animal. I see a high chance of it doubling in a year or increasing five fold within next 5 years as it sells assets and reduces leverage. But there is also substantial chance of it dropping to zero or close to it, if some bad development gets amplified by their leverage. None of these two options apply to the other investments. As time permits, I will try to find more risky bets similar to VRX. I will try to keep my total exposure to such stocks modest (perhaps 20-30%), but spread out over more opportunities.
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