Warren Buffett recently came out with his letter to Berkshire Hathaway shareholders, where he not only discusses the performance of Berkshire, but also shares some investing tidbits. In this year’s letter, he made several comments that I felt were spot on during this recent period of volatility. The first being,
“The connection of value building…that I’ve just described will be impossible to detect in the short-term. Stocks surge and swoon seemingly untethered to any year to year buildup in their underlying value. Over time however, Ben Grahams oft-quoted maxim proves true: In the short run the market is a voting machine: in the long-run, however, it is a weighing machine”.
He pointed out that Berkshire Hathaway stock was not spared during the great recession and went down in value over 50% (the share price is up almost four-fold since the lows of 2009). Buffett did not panic during this time either; he made multi-billion-dollar investments in Goldman Sachs, Bank America, and GE, just to name a few.
One other quote I thought worthy of sharing:
“Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics, or a familiarity with Wall Street jargon such as Alpha & Beta. What investors need instead is an ability to both disregard mob fears or enthusiasms, and to focus on a few simple fundamentals.”
Many of us invested in the dot-com bubble, and here we are twenty years later, with this euphoria surrounding technology stocks again (aka the FAANG stocks, including Facebook, Apple, Amazon, and Google)
This past Saturday, Yahoo live streamed the question & answer session with Warren Buffett and his partner Charlie Munger from the annual shareholder meeting. It is always interesting to get the perspective on things from the greatest investor of our time, so this is how I spent part of my Saturday. I always find it interesting how shareholders want to ask him about the investments they did not make, like Google and Amazon. Mr. Buffet always comes back around to the solid businesses they have invested in, and how they cannot invest in every company. There were a couple of questions from Chinese investors asking about investing in China and other countries outside of the U.S. He shared how they have made direct investments in China as well as other countries around the world. This has been a change in their philosophy over the past several years from always owning only U.S.-based companies. Mr. Buffett is still “bullish” on the American economy and says there is no other country quite like ours. There was a shareholder question about bitcoin and what their perspective was on crypto-currencies. Mr. Buffett came back with what I think is the best response I have heard yet on crypto-currencies, and it went something like this:
“I am sure checks were very disruptive to other payments methods when they were first introduced, but I doubt anyone invested in them thinking they would go up in value over time.”
The “Oracle of Omaha” is always informative. As much as things change, it’s always amazing to me how investor behavior does not. Investors know there will be volatility in the equity markets, yet every time things get a little dicey, they panic. Let’s heed the Sage’s advice and focus on what we can control.
Brett S. Carleton, CFP®
Now that we know what the new tax law will look like for 2018, there are a couple of things to consider before the end of this year. The new law puts limits on itemized deductions, as well as increasing the standard deduction, so you will want to take all of the deductions in 2017 that you can. If you can, be sure to pay your property taxes before year-end. If you have a mortgage, consider making an extra mortgage payment to pull more interest into this year. If there is a charity that you have been considering giving a gift to, now might be a good time to make that gift. If you live in one of the seven states without an income tax and have been considering making a big purchase, you may want to do this before the end of the year. The ability to deduct sales tax will be limited going forward.
So in summary:
1.Pay your property taxes this year.
2. Make an extra mortgage payment this year.
3. Consider making charitable deductions before year-end.
4. If you live in Texas, Florida, or South Dakota, and are considering making a big purchase, now may be the time to buy (you better take advantage of this as it’s not often I will be telling you to make a big purchase).
We will follow-up after the first of the year with more information on how this will affect you.
Brett S. Carleton, CFP®
This time of the year can be very challenging to try and stick with a budget. We are bombarded with images of the latest must have gadgets everywhere we look. Then there are the end of the year holiday parties and family gatherings where we feel obligated to bring a gift. How can one possibly stick with a budget? Here are 5 ideas to help create a plan for your holiday gift giving.
1. Have a budget and stick to it. It is a good idea to set aside the money and pay for the gifts in cash. This will also help if you must buy something online and pay with a credit card.
2. Create a list of who you will buy gifts for and what you will get for them. This will help to prevent impulse buys for someone.
3. Do a little research before purchasing the gifts. Check for the best prices online before going to the store.
4. If you normally buy gifts for everyone in your family, consider drawing names so everyone will only have to buy one gift. This can be fun because you can put more thought into the gift. Some families will do a white elephant gift exchange where everyone brings a gift and receives a gift. This can be fun especially if everyone starts exchanging gifts.
5. Start a new family tradition that doesn’t require anyone to buy a gift. Go see Christmas lights, go ice skating, or some other type of holiday activity. This is something that will be remembered much longer than whatever gift you receive.
The holidays can be such a fun time, we do not want to ruin it by going into debt. If everything goes onto credit cards and you cannot pay them off, your only lasting memory of Christmas 2017 will be paying your monthly bills. Don’t let that happen this year!
First and foremost, I am thankful for a loving and generous God. I have a great many things to be thankful for, but I know without Him, I would have a much shorter list.
I’m thankful for my beautiful wife, Macey. She is my other half and I would not be where I am today without her. She’s been supportive of all my ambitions and puts up with me every day. I’m certainly thankful for that, even though it costs me a “Yes, dear” every now and then.
I’m thankful for the rest of my family, all my aunts, uncles, cousins, nieces, nephews, and grandparents, but most especially my mom and two sisters. My mom is the greatest woman I’ve ever known. She’s an amazing person and role model. Because of my two sisters, I’m more patient and I learned how to be a great role model myself.
I’m thankful for my two dogs, Odin (the black lab) and Freya (the GSD). Like Bri mentioned, there’s not much like the unconditional love you receive from your dogs and the way they greet you at the door every single day. There’s not a day that goes by that one of these goofballs doesn’t make us laugh.
I’m thankful for my work family at Heritage Wealth Management. The folks here have welcomed me with open arms and brought me straight into the family. I’m also thankful to be serving our families. It is (literally) because of our families that I go to work every day, and it has always been my goal to give back to the community using the gifts and talents that God has given me.
Last, but certainly not least, I’m thankful for the most recent gift our family has received, a healthy pregnancy! We are expecting a baby girl in April and could not be more excited! I’m most excited to be becoming a father, but to also share all these things I am thankful for with her.
I am thankful for family, including our wonderful grand baby, who puts a smile on our faces every time we see him. I am also, thankful for friends, extended family including my work family. What a great group of professionals to be with daily and a wonderful company to work for. I’m grateful we had the opportunity this year to travel and visit with extended family that we haven’t been able to see for many years. We noticed on our trip that some things never change, which brought back many childhood memories. I’m thankful that none of our friends and family were affected by Hurricane Harvey, what a devesting storm, but I wish hope for those who were affected. I am thankful that this year, our family will be all together on Thanksgiving. Thanksgiving is one of our favorite holidays, you can’t go wrong with family, food and good stories.
As always, I’m grateful for a good many things. I think it’s important to have gratitude for everything we have in life. Our good fortune comes from the investment of time talent and treasure by parents, teachers, mentors, friends and coworkers. Being in a time and place where there is opportunity plays a significant role, but these are all gifts, no matter how great or small our portion is. Here are a few things that I’m especially thankful for this year:
Thank you all for being our clients, asking good questions and keeping us on our toes. I wish you all a Happy Thanksgiving.
When you ask people what they are thankful for, you usually hear the obvious answers of “our wonderful families and friends, our houses, the food we eat everyday, good health”. While I too am thankful for all of those things and will share the people I love in the pictures above, there are a ton of little things that I am thankful for. Here is a list of the little things in life that I am thankful for, because isn’t it true that it is the little things that are what make life so great?
Every year at Thanksgiving, we reflect on what we are thankful for. I try and reflect everyday on the many blessings that I am not only thankful for, but grateful for the opportunity to bless others so that they can look back and be thankful as well. I am thankful for my family, my children and my husband. Every day I try and show them how grateful I am for their loving, kind and genuine souls. They inspire me every day to not only be my best, but to always strive and reflect on all our blessings. They continue to encourage me to live life to the fullest and to not take one second for granted. I am thankful for and appreciate their love for life and their desire to make this world a better place. “What lies behind you and what lies in front of you, pales in comparison to what lies inside of you.” ~Ralph Waldo Emerson
When Bri asked me to take a few minutes and share with you the things I am personally thankful for, a hundred different things raced through my mind (ex. The season the Astros are having!, living in the United States with all of the freedoms we have). As I reflected more on this though it is the people in my life. Laura and I are so fortunate to not only have our children living either with us or nearby, we also have a large extended family in the Houston area. At times it seems like we always have some family obligation to attend, although I am not sure what we would do without family so close.
Growing up the son of a Lutheran Pastor taught me so much about caring for/serving others. When I was younger my two brothers and I would be forced (ok maybe not forced) to help those less fortunate than us. The three of us were young, strong , and free! We could never understand how my father could find all of these families that needed “our” help. When we were older and driving pickup trucks, we were now not only free labor, we could also move people. I make lite of this because I am so grateful for my parents and the values they instilled in us. It is so rewarding to be able to give back and share some of the many blessings we continue to receive.
I am ever so grateful for the team and Heritage and their compassion and care for you. Finally I am so grateful for you and your commitment to Heritage. It is a pleasure to come to work every day knowing that we are helping you. I would like to wish you a Happy Thanksgiving.
Sometimes life gets so busy that we forget to stop and think about all that we have to be thankful for. This November, I want to challenge you to pause each day to reflect on the good things in your life but I also want to challenge you to apply it to your life. For instance, if you are thankful for your family, maybe schedule a family outing to show just how thankful you are for them. If you are thankful for the clothes on your back, maybe consider donating the clothes that you don’t wear anymore and give them to someone in need. Thankful for your friends? Write them a personalized card telling them how much they mean to you and mail it to them. It is refreshing to get a personalized letter in the mail every once in a while.
In the month of November, the Heritage team will be sharing pictures and a short blog on what we are thankful for. This will be featured on our brand new website and we will share it via our Facebook page as well.
The Heritage Team would love to hear back from you to read about what you are thankful for and we would love to see pictures of you and your family or anything you are thankful for.
I hope you participate in this with us and we hope you know how thankful we are for you, not only in the month of November, but every month. You all mean so much to us and we are thankful for you for choosing Heritage.
Bri Trevino and the Heritage team