Blair duQuesnay 5.0 2 ideas

"I do not buy this argument that you can look through to the cash on their balance sheet as part of yours because you have no ability to tap that liquidity... That stock can still fall regardless of how high the cash level is." Retail investors often use mental accounting to justify dangerous portfolio concentration (e.g., treating Berkshire's cash pile as their own fixed income). However, idiosyncratic equity risk remains; if the broader market drops, these specific stocks will still suffer equity-like drawdowns. NEUTRAL BRK.B / PLD for concentrated holders. Investors should sell down oversized positions to buy broad index funds or actual fixed income, even if it triggers capital gains taxes. The specific companies could heavily outperform the broader market, causing the investor to miss out on excess returns and pay unnecessary taxes.