June, 2004: 9
6/9/04-I continue to find few compelling equity bargains. One possible exception is Berkshire Hathaway (BRK/A) (BRK/B) which is down from about $3100 per class B share earlier this year to around $2900 recently, though without any obvious significant reduction in its intrinsic value. It seems likely that the true worth of this extremely well managed company, with an average increase in book value of greater than 22% annually over several decades, will continue to improve substantially better than the record of the S&P 500 Index for the foreseeable future, even if Chairman Warren Buffett should die. The corporation's overall culture would surely remain intact.
Our total nest egg is now up 1.5% for the year, after excess 2004 expenses (over income) of $22,500, to date. Were the amount we'd had to withdraw for extra expenses included in our total return, the nest egg is up 5.1% since the end of 2003. The S&P 500 Index, meanwhile, is up 1.7% in 2004.
The Essential Value Portfolio (EVP) has gained 11.9% since its 8/18/03 inception, though several of its holdings were purchased well after that date and over 23% of the EVP is now in cash.
Our assets presently include no non-mortgage debt. I am still using any strength in the markets as a time for selling off stocks and raising cash-equivalents. Equities remain, however, at about 75% of out total financial assets.
Otherwise, currently no changes are being made either to the EVP or the nest egg as a whole.
My wife and I are about to leave on a trip, due to return at the end of June or beginning of July.
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