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Bob Brinker

Berkshire Hathaway

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WELCOME TO

THE

COMMON SENSE INVESTMENT CLUB

Welcome to Central Jersey's newest Investment Club. We are currently open to new members who want to be a part of a sound investment organization. Come and see if this style of investing is your cup of tea. Contact the founder at Luis1600@Hotmail.com thank you.

 

Common Sense Trust Fund ®

Capital Appreciation Plan

(Somerville, NJ)

 

 

Welcome To A New Way of Doing Business

 

 

 

 

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SHORT TERM GOALS

 

Mission

 

This Investment Club is designed to be a productive learning environment benefiting from an all industry approach to investing. The Common Sense Trust Fund is a Portfolio of the Common Sense Investment Club. The Trust seeks Capital Appreciation through established growth businesses that are position to lead their respective Industries. The Club believes that exceptional returns are not a consequence of portfolio turnover, cutting losses or selling its winners. The Club intends to maintain a near 100% equity investment at all times. The Club is not concerned with the day-to-day fluctuations in the markets. The Club prefers to shun the everyday market timing calls of analyst and other transaction driven hoopla. The Club is enthused with the advantages the index-like properties of passive investing has to offer over other strategies. The Club believes in retaining capital and owning excellent growth companies whose management is aggressive in executing strategies, sensitive to social trends and carry below average company specific risk. The Fund is designed to remove emotions from investing as it puts time and low management cost on its side. The Trust seeks to zero-in on the fundamentals of the leading companies on a schedule basis while minimizing distributions to its shareholders.

 

The Securities and Exchange Commission has not approved or disapproved the Fund’s shares or determined whether this Investment club is accurate in its contents or relevancy. Any information contained in the links or the contents of this website can not be misunderstood with financial advise. The Club will not be held liable under any circumstances for information contained here.

 

 

Reasons to own Berkshire Hathaway, and other things to ponder. Does Vanguard, Fidelity or any of the more expensive outfit sit on the board of directors of any companies their Mutual Funds own? Warren Buffet does!! Berkshire Hathaway holds a portfolio of wholly owned private businesses. The businesses of Berkshire Hathaway are as diverse as any other mutual fund. Berkshire has over 27 Billion to invest from private insurance operations at no cost to Berskhire Hathaway. It costs shareholders 600 Million in fees per every 100 billions under assets to manage Fidelity Magellan in 1999, 200 million for the Vanguard Index 500, but only 6 million for holders of Berskhire Hathaway. The index 500 has returned 12.92% from 1978 to 1998; Berskhire has consistently beaten the S&P 500 averaging 35.51% in the same period. Only a small percentage of Managers beat the S&P's performance, and good luck with taxes and a repeat of those performances. Active investing in the form of constant vigilance for most investor means; (1) have a method of awareness [scout, insider, newsletter, marketplace, friend, auto e-mail alerts, etc.] (2) Guess the right industry. (3) Guess the right Company. (4) Guess the right management. (5) Be early in the development of the industry, company and management. (6) Correctly time your purchase. (7) Have a network of information (monitor).(8) Correctly time your sale. (9) Pay taxes if you have a gain, an effect that increases cost by about 3% annually investing. (10) Repeat steps 1-10 over and over again. No taxes due from the return on Berskhire Hathaway as there are no taxable gains year over year from distributions or dividends. Berskhire in effect is a portfolio of 47 different Subsidiary Companies in addition to having large stakes in Capital Cities/ABC (Disney), The Coca-Cola Company, Federal Home Loan Mortgage, GEICO and The Washington Post Company. Intelligent investing means never having to sell. If the price of the chosen securities goes down, you buy more or simply wait for the long-term realization of its underlying value. Emotional investing means revolving ownership chairs. The average NASDAQ stock is held just six months. One stock was recently traded so frequently that its complete ownership changed hands eight times in one day. Emotional investing jumps quickly, frequently, and time is always of the essence. Intelligent investing believes you only need a few good ideas for an investment lifetime. Intelligent investing takes the emotional out and will often dollar cost average and or buy an index fund. Emotional investing will sell within minutes if the price is right. Intelligent investing allows you to turn off the market. Emotional investing forces you to watch the ticker tape and tune in all the noise. Intelligent investing considers the tax consequences. Emotional investing generally regards taxes as just something to worry about in the future. Besides. If you’re making money it’s just a cost of doing business. If you have some losses you can use them to offset the gains. Intelligent investing considers the overall rate of return net of taxes and costs. And compares this net return to a bench mark. Emotional investing believes that they know best. Intelligent investing is about capital allocation. Emotional investing is about market timing. Intelligent investing is boring. Emotional investing is exciting. It’s about technology. It’s about momentum. It’s this new thing. Intelligent investing is about inactivity. Emotional investing is about rapid-fire, constant trading, and replacing those in favor yesterday with those in favor today. Intelligent investing is about self-reliance. Emotional investing is about relying on a broker or financial advisor. They take credit for the ups and have someone to blame when things go down. Intelligent investing is about loyalty. Emotional investing is about what have you done for me this week. Intelligent investing is using your brain. Emotional investing is about using your heart and feelings. Intelligent investing is that practiced by Mr. Buffet. Berskhire Hathaway is boring (no gimmicks), does not come across as sexy investment to those that like to flip stocks more than once every 5-7 years. The reverse is a Nasdaq trader who likes to be in control and trade as much as possible about 18 in one year for the average QQQ trader. Some traders buy expensive software to trade 10, 20, even hundreds of time in one day; they call that playing it safe and taking little risk. Disregard that he has to make up for the taxes, cost of trading (about 20 dollars each way, that’s about (20*10perday*250 business days) $5,000, then you have to wonder if all the time and stress of being fixed to news and monitors paid off, if the lost time and aggravations were worth the killing. Its as no surprise that 99% of traders have added no value and would have been better off owning a mediocre mutual fund. Now take another look at the proponents of these vehicles of trading, the Merills (ETF’s), and other firms that own the highways of trading. Then tell me which of the two, either the costumer of the executives at these firms are reaping the rewards (like a wise man said, where are the customer’s yachts?). The bulk of what you have read has come from a fascinating book by Robert P Miles “ 101 Reasons to Own the World’s Greatest Investment” published by John Wiley & Sons, Inc. I recommend it.

 

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