Investing Insights: Portfolio Diversification and Yields in 2021

please stay tuned for important disclosure information at the conclusion of this episode welcome to the investing insights podcast for morningstar in this week's podcast david blanchett shares advice for retirees in today's low-yield environment amy arnott and christine benz discuss their research on portfolio diversification christine benz talks strategy about withdrawing money from retirement funds and greg warren talks about berkshire hathaway's valuation let's get started here are david blanchett from morningstar investment management and christine benz from morningstar inc hi i'm christine benz for morningstar.com although bond yields have ticked up a bit in recent months they're still quite low by historical norms joining me to discuss how to ring a livable income stream from a retirement portfolio is david blanchett he's head of retirement research for morningstar investment management david thank you so much for being here thanks for having me david let's talk about uh something that you have researched extensively the interplay between yields and safe withdrawal rates can you talk a little bit about that and what the research suggests that retirees should do in terms of their withdrawal rates when yields are as low as they are today yeah so you know there's been a lot of research going back over two decades now on how much you have to have saved when you first retire um and you know not surprisingly the assumed rate of return on a portfolio really really determines what that number is going to be i mean if if if bonds are you know if we if we had 30-year bonds right now yielding 8 you could have a pretty nice safe withdrawal rate but today to your earlier point bond yields are relatively low and so i think that retirees have to kind of take a step back and say what what is a safe withdrawal rate today given lower possible returns in the future so looking at the standard sort of four percent guideline would you suggest that retirees who are just starting retirement think about maybe taking a lower amount because of those lower yields i actually really like four percent um you know i i've done a lot of research so if you here's the thing so four percent the rule itself it's been it's been redone lots of ways but it's it's largely based on historical us returns um if you rerun the analysis and you kind of better calibrate the return assumptions to today you know the the results that led to four percent lead to like three percent or less okay but here's the thing there's a lot of incredibly restrictive assumptions in that analysis you like have to have a certain amount of income every year for 30 years increased by inflation um you know it deems failures you're following one dollar short in that 30th year of retirement so i still think that four percent is a relatively good starting place for a lot of retirees that everyone is a is a healthy married couple age 65. now that being said there's other important questions too like how much guaranteed income do you have you know how willing are you to kind of cut back on um if you have to but but you know high level yes like things are more difficult today than they've been historically on average but four percent i think still is is an okay place to start okay so let's talk about the portfolio itself and how retirees should think about constructing their portfolios in this very low yield environment i talk to a lot of retirees who are kind of inclined to throw bonds and cash overboard because of their very low yields they are investing exclusively in dividend-paying stocks what do you think about such a strategy um that emphasizes stocks perhaps to the exclusion of safer assets yeah so you know i retirees you know part are an odd bunch to some extent um if you look at surveys you know so when i do research on retirement you know i assume that people are gonna spin down their nest eggs like you just don't you don't you save to spend it but that's actually not what happens right people in retirement really like the idea of living off of income right they want to leave the principal alone to kind of you know hedge against an uncertain lifespan you've got health care costs you've got request goals all these things and so the goal is often i'm going to live off of the income well like that is that's that's i think doable you know if if your portfolio is yielding if you've got bonds that yield five percent a year um we're not there right now and so i think a lot of retirees are saying well hey you know how can i generate income from a portfolio and one way to do that is by owning dividend-paying stocks and um you know the whole like it's not actually a rational approach but it's an approach that aligns with the goals of retirees and i've been looking at that topic using historical data so um you can look at data going back from like 1870 to 2019 for 16 different countries you can say hey you know how does the optimal strategy change for someone who wants income in different yield environments and you know long story short in an environment like today where you've got dividend yields that are roughly equivalent to the yield on treasury bonds it can make a lot more sense or at least it has made a lot more sense historically to allocate more to equities that pay dividends versus just owning bonds because you can get just as much yield or higher from those stocks and possible capital appreciation now i do worry about retirees going a bit overboard and just you know saying i'm not going to you know i'm not going to own any bonds when i own a lot of equities and then the markets collapse but at least historically speaking that's been a pretty viable strategy okay so if a retiree wants to emphasize dividend payers as part of their portfolio what's a reasonable allocation can you give us sort of a ballpark estimate or how should retirees approach the percentage allocation to stocks relative to perhaps safer assets like fixed income and cash yeah it's it's hard to generalize like one number you know if i had to pick a number up to my head i would say maybe 50 i mean one benefit about owning dividend paying stocks is that they're typically relatively mature companies in mature industries that should do relatively well if the markets go down like they're not going to these aren't tech stocks that are going to go up 100 percent and they're relatively safer now you know to the extent that you as a retiree are are okay with you know not you know if you're not going to sell your portfolio no matter what if you're if you're comfortable holding on for the long term maybe you can have all of your portfolio dividend paying stocks you have to understand the risk because you know i i i just did some research back you know looking at participant trading in 2020 and and the folks that made the biggest mistakes were those that were older and invested aggressively an older being defined as someone who's near retirement and invested in mostly equities and so my my one concern about this recommendation is it's kind of against what you see retirees actually do which is they tend to freak out a little bit when equity markets fall if they're invested aggressively so to the extent that you can cannot react to a market downturn then i think you can allocate potentially pretty heavily to dividend paying stocks but just be aware that there's also a lot of risk there okay i want to talk about other higher yielding security types maybe bank loan investments or junk bonds emerging markets bonds how do higher yielding higher risk fixed income investments fit into the picture if at all so they can i think the one thing that people need to really realize is that the realized return on on high yield slash junk bonds is not the yield when you buy it right defaults are a really big deal and the actual spread in the realized return of of of higher yielding bonds is actually quite similar to those with with better credit quality due to the impact of defaults and the problem i mean the problem with defaults is just that that when they happen it's it's somewhat catastrophic but it doesn't usually happen all that often and so i think that you can you can you can think about you know you know doing things to increase the income of your portfolio but i would just say that you know like but you're also increasing the risk i think that we often define the risk of a portfolio as equities or fixed income in some sense high yield bonds can be riskier than equities right so don't kind of kid yourself thinking i'm gonna i'm gonna buy some high yield bonds and it's still not making my portfolio very aggressive it can have just as much an effect or more as buying you know like mega cap high quality stocks so is it a way to think about it perhaps that i use such investments to be sort of equity substitutes as opposed to supplant fixed income allocations yes i mean a lot of the things that you mentioned are you know you know people might call them fixed income but they're very risky fixed income and so you know if you want a different type of of you know i mean i define equity as like as higher volatility right higher chance for loss a lot of the the investments that you mentioned especially high yield bonds have that potential so just view them accordingly in a portfolio like a a safe portfolio is not a fifty percent allocation to high yield bonds nutrition allocation to large cap stocks you've got a very risky portfolio there understand the risk of the investments that you're using okay david such a helpful overview thanks so much for being here thanks for watching i'm christine benz for morningstar.com expand your investing horizons and look to the long term with morningstar's podcast the longview join hosts christine benz and jeff patak as they talk to influential leaders in investing advice and personal finance search for and subscribe to the longview today [Music] now here are amy arnott from morningstar research services and susan jabinski and christine benz from morningstar inc hi i'm susan schubinski with morningstar investors may struggle with the concept of portfolio diversification specifically which asset classes they should add to their portfolio if they want to diversify their u.s stock exposure morningstar recently published some new research on the correlations of various asset classes versus u.s stocks joining me today to discuss some of the study's findings are two of the paper's authors amy arnott who's a portfolio strategist with morningstar and christine benz morningstar's director of personal finance thank you both for being here today great to be here uh christine let's start by first defining our terms can you explain briefly what correlations are and how investors can use them to construct portfolios sure susan correlations describe the extent to which the performance of two assets have been correlated with one another and to measure that we use a statistic called correlation coefficient and what you're looking for if you want to build a diversified portfolio is that you'd like to find a negative correlation coefficient if the number is negative one that means that the two assets are inversely correlated when one goes up the other goes down if their correlation coefficient is 1.0 that means that performance is very much in sync so they have less diversifying abilities with one another it's important to remember though that correlation coefficient just captures direction rather than magnitude so if i have two investments one goes down two percent and the other goes down 20 percent well that's a big difference to me as an investor but correlation coefficient doesn't pick up on that differential it's just picking up on the fact that they both went down now the study that you both were recently involved in looks at the correlations of various asset classes against u.s stocks specifically amy talk a little bit about why u.s stocks were really sort of a starting point here sure so a lot of investors have kind of core holdings in u.s stocks and that's also the major type of risk that people are trying to diversify away from so we used that as our starting point and we measured correlations against the morningstar u.s market index now as you noted in the report correlations tend to increase during periods of market stress so let's talk a little bit about 2020 specifically which where we did experience some market stress what in broad strokes did correlations look like during that period amy so we did see correlations increase across most major asset classes early last year during the market turbulence there were some fairly big increases in correlations especially in non-treasury bonds like corporates municipal bonds and global bonds as well as sectors like real estate and utilities basically the trend was investors were selling off any type of higher risk asset and that was reflected in the correlation numbers so then how did what we saw in 2020 with correlations perhaps differ from what we had been seeing for say the past decade or or two prior to that well for the most part what we saw in 2020 was really a continuation of previous trends overall over the past 10 to 20 years we've seen correlations trending up and that pattern continued in a number of different areas including equity market sectors investment styles factor profiles and even some alternative investments correlations for international markets commodities and small cap stocks remained fairly high as they have been over the past few years well those on treasuries and cash remained low so let's dig a little bit deeper into a couple of asset classes that maybe you know investors have traditionally been using for diversification christine let's talk about bonds first um what types of bonds have been traditionally better diversifiers against u.s equities and then conversely maybe which bond types haven't done as great of a job when it comes to diversification right amy referenced a couple of them treasury bonds have been pretty consistently effective as diversifiers when we look over time periods as far back as the past 20 years cash has recently looked a little better as a diversifier alongside treasuries a lot of other fixed income categories have been less effective as diversifiers some of them you might not expect to be especially effective so the whole category of lower quality bonds has not served investors especially well as as diversification tools so this would include junk funds emerging markets bonds bank loans and that's because that as amy said people are often getting out of risky assets when they're getting out of stocks and investors view these fixed income types as riskier fixed income assets what's a little bit more surprising to me is the extent to which you see not great diversifying abilities among categories like funds that fall in into morningstar's intermediate term core plus category these are funds that are generally pretty high quality but include some lower quality exposures around the margins these haven't served us investors especially well as diversifiers but here again i would point out that magnitude is important that uh even though these categories correlation coefficients with equities aren't necessarily in negative territory historically they have been able to deliver positive returns during extended periods when stocks have been down so do the historical correlation pattern that we had observed really hold true for bonds in 2020 as well well it generally did so we saw treasuries come through generally very nicely especially short and intermediate term treasuries cash as i mentioned looked relatively better than it has and i think that that may simply be that the yield differential between bonds certainly between treasuries and cash is still pretty low today so some investors might have viewed cash as a worthy alternative to treasuries or other bond types simply because they weren't earning that much more by taking on the risk of bonds so generally generally speaking i think we saw a persistence of some of the patterns that we've seen historically so you know given that it seems like treasuries have actually done a pretty good job diversifying both in 2020 and over longer periods is it fair given where the bond market and the stock market are today is it fair for investors to sort of expect treasuries to continue to be good diversifiers for say the next 10 or 20 years that's a question that was really nagging at us as we worked on this paper because we have experienced a really specific sort of investment in environment over the past couple of decades where we've had generally declining bond yields which is good for treasuries we've had very low inflation and so i think the question in my mind is whether treasury's effectiveness as ballast for equities will carry forward into the future in an environment where perhaps we will have rising yields where we could have more inflation when we look back to periods like the 70s and early 80s where we had higher inflation and higher interest rates treasuries weren't quite as effective during that period but one thing i come back to is that there's quite an intuitive reason that investors gravitate to treasuries in periods of stock market duress it's mainly that they're viewed as a store of value a a an emblem of quality for investors and i think that that will be persistent and then another tailwind for treasuries in periods of stock market stress is that those periods often coincide with periods of economic weakness and that's often when we see yields declining which is good for high quality bonds it tends to be a good environment for treasuries because they're a reflection of whatever is going on in the interest rate environment so i think that those tailwinds are likely to persist unless we see inflation and interest rates move in into some really uh historically greater higher pattern than we expect to see now let's pivot over and talk a little bit about international stocks which are another component that are you know that investors often have in their portfolios amy you suggested earlier that international stocks maybe weren't the best diversifiers for u.s equities in in 2020 talk a little bit about the correlations there sure so a lot of people think of international stocks as being a one of the first places to look to for diversification but if you look at correlation coefficients most international markets have actually shown fairly high correlations with u.s stocks recently and cova 19 has obviously had a worldwide impact so losses on international stocks weren't really that much lower in early 2020 and then how did that compare again over the longer time frame that the study looked at so if you look back over the past 20 years or so we've seen fairly high correlations between u.s and international stocks if you take a benchmark like morningstar's developed markets xus index it has a correlation coefficient of about 0.9 versus the u.s market that's much higher than previous levels if you go back further in in history so you're not necessarily getting as much diversification value as you might think from international stocks and amy what about some other types of investments that people might look to for diversification like commodities or gold gold or alternative investments how did those all stack up from a correlation perspective do they really provide that much diversification so it was really a mixed bag gold continued to do extremely well as a safe haven and portfolio diversifier alternatives held up pretty well overall but other types of commodities and real estate had pretty sharp losses in early 2020. so in general christine to wrap up you know given the rise that we've seen in correlations in general over the past couple of decades how should investors be thinking about portfolio diversification today well i think simpler is better you probably wouldn't be surprised to hear me say that that when we look at treasury bonds in cash they have proven to be quite effective as diversifiers for equities so even though we've seen correlations in some other areas increase those two look to be decent diversifiers and then again i i think it comes back to time horizon susan that investors really need to know their time horizon until they'll need their money for spending and so if you go through these periods of equity market weakness which we investors periodically endure it's really important that you're not a seller in those periods and that if you are a seller you probably want to have cash set aside if there's any reason that you'll need to be unloading anything but cash for during those periods it's probably not a great idea so i think time horizon can be incredibly informative when thinking about building a diversified portfolio and thinking about maintaining correlations on an ongoing basis well christine and amy thank you both so much for your time today this is a really important part of the portfolio puzzle diversification so we appreciate your insights thanks so much susan thanks susan great to see you both i'm susan jabinski with morningstar thank you for tuning in six days a week we deliver the latest news for investors just say alexa enable the morningstar skill or visit morningstar.com alexa next christine benz and susan zubinsky discuss the best way to take income from your retirement portfolio hi i'm susan jabinski with morningstar with yields still low retirees may be grappling with where to go in their portfolio for income and they may also be grappling with when to go into their portfolio for income joining me today to talk a little bit about that last topic specifically is christine benz christine's morning stars director of personal finance hi christine hi susan great to be here so we want to talk a little bit today about the timing of taking income from your portfolio but before we do let's talk a little bit about where to go in your portfolio or where retirees can go for income these days we've seen a little bit of an uptick in yields where what should retirees be looking at well it's tricky susan as you indicated that strategy of extracting income from income producing securities is really really tough today where high quality bond funds are yielding like two percent even dividend focused equity funds are maybe a little bit above that level but not too much so i am a big believer in taking a total return approach to your portfolio using income perhaps to fund a portion of your living expenses but then when your portfolio is up not getting too worked up about having to take your withdrawals from those appreciated portions of your portfolio just use that total return mindset because flexibility is really an important advantage to bring into retirement if you can be a little bit flexible about where you go for that for those withdrawals that can lead you to a more optimal portfolio over time especially if trimming back appreciated areas reduces risk in your portfolio so let's pivot and talk a little bit about the when you should be tapping into your portfolio during retirement for income what should retirees be thinking about well it's a really good question i like the idea of staying a little bit ahead of it so that's one of the ideas behind this bucket strategy where on an ongoing basis you're maintaining one to two years worth of portfolio withdrawals in cash investments and then you're periodically refilling that cash bucket as you go along or alternatively you could it say it's 2021 in 2021 you would begin setting aside the proceeds either from income distributions or portfolio rebalancing you'd want to begin building up the funds that you will spend in 2022. so the naming name of the game is to stay ahead of it and the key reason is that things can happen to your holdings that can change their income production so a really basic example would be a company that you had relied on or a fund that you had relied on for income distributions suddenly reduces its its income you'd want to be prepared and having the money filled up a little bit ahead of time helps you stay ahead of those periodic disruptions and income flows now you're a big believer in retirees doing sort of a once per year portfolio review where they go in and try to figure out you know how they can source cash flows for the coming year is there a particular time of year that can they do it at any point over the course of a year do you recommend a particular time of year to do this i think you could do it at any point in the year from a practical standpoint i think that year-end or toward year-end is an ideal time because you have some tax planning considerations that come into play so if you're over age 72 you have those required minimum distributions to contend with you may want to do some tax loss selling you may want to do some charitable giving to tie in with the year-end so i tend to gravitate toward that year-end period but then again year-end gets busy for a lot of us especially with the holiday season and so if doing it earlier in the year is a better time for you that's fine too but ideally you would tie some of these threads together required minimum distributions tax planning charitable giving now what about regular income distributions that a retiree may be receiving over the course of a year how how should they be handling those one idea i like is if you aren't reinvesting back into the positions letting those funds build up in some sort of a cash account and that way you sort of organically refill your spending bucket for the following year through those income distributions so you know if you have bonds and dividend-paying stocks in your portfolio and you're spending four percent from that portfolio well those organically generated dividends may take you half the way to your four percent today they may give you two percent and then you would only need to do rebalancing to supply the additional two percent but i do like the idea of kind of building a fund that you can carry into the year ahead and and use those distributions to supply a portion of your cash flow needs so let's say it's uh later in the year in 2021 and retirees trying to source cash flows for 2022. what other things should be part of the process there right i love the idea of this being a holistic process so the starting point in my opinion would be to think about what sort of withdrawal you plan to take for the year ahead then take a look at your portfolio because the contents of your portfolio will have shifted around during the year so take a look at that portfolio see how your asset allocation is positioned relative to your targets if you need to do some repositioning well repositioning may be your source of cash flow for the following year so think about repositioning with an eye toward improving and aligning your asset allocation with whatever blueprint you're using you would also want to tie in required minimum distribution so if you determine that you need to rebalance out of a given area well that may be those are your required minimum distributions so tie in rmds tie in tax loss selling some investors who find themselves in the lowest tax bracket may be able to do what what's called tax gain harvesting which is a topic that we've written about on morningstar.com and also tie in charitable giving so people who are subject to required minimum distributions have the opportunity to use what's called a qualified charitable distribution to steer a portion of their rmds toward a charity so all of those things can be knitted together in part as part of a year-end portfolio overhaul tax management process you don't need to be in there on a monthly or quarterly basis overseeing your portfolio in retirement chances are you've got other fun things to do i think a good holistic once annual review is plenty for most investors well christine thank you for your time today retirement inc income is of course a critical um topic of conversation among retirees we appreciate it thanks so much susan i'm susan sivinski with morningstar thank you for tuning in and lastly greg warren from morningstar research services talks about berkshire hathaway's evaluation hi i'm susan jabinski with morningstar berkshire hathaway holds its annual meeting this saturday joining me today to discuss what morningstar thinks berkshire is worth is greg warren greg's a senior analyst with morningstar and he covers berkshire hathaway for us hi greg thank you for joining us today thanks for having me susan so uh back in march several weeks ago um we increased our fair value estimate on berkshire uh we pushed the a shares up to four 440 thousand dollars fair value and we boosted the b shares up to 293 and that represented about a 16 increase so what was behind that increase well i mean it was it was a combination of several different things i mean we we were quick to take the fair value down when the covet pandemic hit in march of last year um and it was right to do that i mean we sort of had to see what the impact was going to be overall um and you know between the investment portfolio and the operating companies we're expecting to see you know a fairly meaningful hit to the operations um because they do have a lot of economically sensitive businesses but what happened or ended up happening was second half of the year the investment portfolio did a lot better than we were hoping um and we started seeing much stronger operating performance out of some of the operating companies you know the railroad the manufacturing service retailing kind of stand out because they even they actually posted better than expected margins or profit profitability even with you know pressure on the top line so when the company dropped their fourth quarter uh earnings at the end of february we had a chance to dig through see what was happening and update all of our our forecasts going forward you know right now at this point we're looking at probably more normalized earnings this year and next um you know we'll have to sort of see how much of the cost containment you know will carry forward but you know we've always been generally conservative when we uh value berkshire so it was nice to see them putting up some good solid numbers to be able to incorporate that in now uh berkshire will be sharing its first quarter earnings um in the next several days do you expect to see anything in that report that might lead us to reassess our fair value estimate again uh there's there's always reasons to sort of look at things you know from time to time first quarter earnings generally you you don't really want to look at them too deeply because you're only about a quarter of the way through the year um but you know that said you know there are a few things we're really kind of looking for as we get through this period one was has geico returned to more normalized levels of top on growth profitability last year was a tough year for them they had to give a lot of credits uh to customers had to sort of hold off on cancelling policies um and we'll have to see sort of where things have panned out um you know the other thing we'd like to look at is you know whether or not the covet loss reserves are done you know they they put away a couple hundred billion dollars last year um you wanted to sort of make sure that they're not going to put more aside for potential losses as we move forward uh then we'd like to look at sort of bnsf you know where the stronger results we saw in the back half of the year uh indication of uh better performance on their part um we've been critical of them the past several years because they've not adopted precision schedule railroading which would be a big boost to their margins but they they actually saw a decent uh improvement in profitability you know back half of last year so let's see where that is and then with the msr i i noted you know just previously uh they had a really really big boost in profit margins better than we were expecting and and we'd like to see if that's going to be contained um if they could maintain margins at that level that's sort of a better indication about where profitability might be three four five years from now and then i guess the real final thing we'd like to look at i think a lot of investors are curious about is how much stock did buffett buy back during the quarter you know he picked up about nine billion dollars a quarter the last two quarters of last year run rate they were they're probably doing about four or five billion dollars for the first month or so based on what we saw um so if they do another nine billion here that would just you know add more uh positive news for investors so now we continue to assign berkshire a wide economic moat rating um given you know the economy and the market and what we sort of see going forward do we feel like berkshire's competitive advantages are stable yeah berkshire's a little bit tougher than most companies because much like we do the valuation we kind of have to look at the mode on some of the parts basis we have to sort of split out the different businesses um historically you know when we look at the insurance business it's generally been a nomo business you know overall berkshire tends to have some of the better players they have you know the very solid strong balance sheet uh ability to to underwrite things a lot of people couldn't underwrite but at the same time they're very very disciplined when it comes to underwriting you know brooks is one of the few companies that isn't trying to make up for uh underwriting losses with a lot of investment gains so from that perspective they're they're pretty much a step above everybody else uh railroads a solid white wide-mode business um let's see how that kind of pans out there's been some talk about some consolidation a few other things as we move forward again with anything with the mode same with evaluation we're always looking at uh competitive positioning and sort of thing is anything diminishing is anything improving um i think with the with the energy business we've seen some improvements they picked up a pipeline business last year that actually sort of helped widen things out but overall solid narrow mode business you know they basically exchange uh excess returns for having an oligopoly or a monopoly in in the areas which they operate and then with the msr business you know pretty much solid narrow mode firms across the board there if you know as we've we've seen you know this uptick in profitability for them as a permanent addition that tells us something about how strong those votes really are you know the ability to sort of maintain positioning and maintain profitability even in the face of a really really terrible uh um economic condition like we saw this past year you know and then as far as the moat the wide mount mode overall you know it really has always put over the top as sort of this ability to reallocate capital within the businesses so we're always looking at capital allocation opportunities what they're doing with the cash how they're building it up we're happy to see now that they're finally starting to buy back stock we've been pushing for them to do that for a number of years now that'll only help returns over the long run and then finally greg sort of the the magic question where do we think berkshire you know is today price wise do we think it's overvalued undervalued fairly valued and why uh the shares have had a pretty good run of late they're about 20 year-to-date i think now and they're about 50 up over the past year but again that that was really you know coming off of that that march you know 2020 sell-off uh and the stock did struggle for a few months there but once buffett announced that he was buying back stock once it was cleared to investors that they were actually doing that plus putting money to work in investments and acquisitions the shares really kind of took off and and people are sort of reassessing and looking at it and saying hey this is a company that can continue to put a ton of cash to work if only just in sherry purchases that would be meaningful for investors in the long run we look at the fair value right now you know where the markets uh uh market prices on the stock is trading at about 10 discount a little bit less than that so it's not as exciting as it was you know a few months ago but at the same time if we look at a price to book basis the stock right now is still trading at 1.3 times you know what our estimate of this year's book value will be and 1.2 times forward historically it's traded about 14145 so yeah there's still some movement you know potential there you know as i said our fair value tends to be a bit more conservative sometimes it it doesn't come up with you know sort of what we've seen at p price to book multiple basis historically but you know we still think there's you know generally some room to run there because investors do look at it on that basis well greg thank you so much for your time today and your insights into berkshire's fair value we appreciate it thank you susan you have a good day too i'm susan sibinski with morningstar thank you for tuning in that does it for this week's investing insights podcast for morningstar we hope you have enjoyed our program and we welcome your feedback please send your comments and questions to podcasts morningstar.com from everyone here at morningstar thanks for listening this recording is for informational purposes only and should not be considered investment advice opinions expressed are as of the date of recording such opinions are subject to change the views and opinions of guests on this program are not necessarily those of morningstar inc and its affiliates 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Channel: Morningstar, Inc.

Views: 8,649

Rating: 4.9281435 out of 5

Keywords: stocks, Morningstar, portfolio diversification, warren buffet, berkshire, berkshire hathaway

Id: MHt5-qwglCE

Length: 40min 42sec (2442 seconds)

Published: Fri Apr 30 2021