So, I've now decided to sell off my current US stock holdings, only retaining my 1 "B" share in Berkshire Hathaway, and a small parcel of Microsoft stock. Looking at the stocks I'm selling three have done extremely well, but five did very badly. Overall these shares are down over 10% in USD terms, and much more in AUD value:
This table doesn't have the AUD values of the stock sales yet, as the official ATO exchange rate for 27 May won't be published until June. I expect to make an overall capital loss of around $10,000 in AUD terms, so I might sell off some Australian stocks that have made capital gains and be able to offset the losses against the capital gains in this year's tax return. I can either use the proceeds of the Australia stock sales to reduce my margin loan balances (which with interest rates up around 10% aren't such a good idea) or else reinvest the proceeds on the next market dip.
I think I'll reinvest the proceeds in BRK.B stock - increasing my holding to 15 shares of Berkshire. My new theory is that Warren is probably better at picking individual stocks than I am, and he may be picking up some bargains in the current bear market (I think he was sitting on a fairly large cash position last year). I don't believe BRK.B pays any dividend, so the small Microsoft holding is needed to provide some income, and therefore make the interest on the investment loan I used to fund this account tax deductible. Investing in Berkshire seems a bit strange - I'm moving away from picking individual stocks myself these days, and investing in low-cost index funds instead (for example in my retirement account). With Buffet's incredible investment track record and advancing years it also smacks of chasing last years winner, which is a well-known *bad idea* ;)
Anyhow, I'll probably let this investment sit for the next ten years or so. Hopefully BRK.B outperforms the market, the AUD drops back against the USD over that period, and the interest rate on my investment loan drops back during the next few years so it's less than the ROI! At least by only having two stocks in this account (and only one paying a dividend) the paperwork for my tax returns will be slightly simplified. This account represents about 7% of my NW, and around 3.5% of my investment portfolio (including borrowed funds), so by itself it won't have a massive impact on my results over the next ten years.
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