Missed Out On Warren Buffett's BRK.A Stock? BRK.B Setting Up Nicely!

Embrace Compound Growth

I read today that Warren Buffett is now worth over $100 billion. You may not be aware of this but the Oracle from Omaha was worth only $300 million in comparison just after he turned 50. 

It is a given that a large percentage of the population will not even get to $300 million in their lifetime let alone $100 billion but what this highlights is the importance of playing the long game and the power of compound growth. 

Most everyday people simply want a generous nest egg to leave behind for their loved ones, somewhere in the high 6 figures to 7 figures region, a very achievable target if you stay true to the principles of good investing. What are these?

• Have a simple process that establishes high-probability assets. 
• Execute a robust strategy that cuts losers short and lets winners run. 
• Compound strategically to accelerate the profit phase. 
• Repeat between now and retirement. 

Early investors into Berkshire Hathaway Inc (NYSE: BRK-A) will be sitting pretty with the stock currently worth almost $430,000!

However, look at (NYSE: BRK-B), and you have a far more affordable stock and one that is setting up for a potential entry. Let's do some analysis.

The Monthly Timeframe

A stock that has a history of trending well. Price is trading above the high of last year (green line) giving it a bullish bias. Price has also moved over 20% this year. 

The Weekly Timeframe

Price is trading above both the 200sma and the 50sma giving price a bullish bias. I keep it simple on this timeframe. 

The Daily Timeframe 

Conclusion

As the expression goes, the longer the consolidation, the bigger the breakout. With price trading inside a consolidation since May, circa 6/7 months, a confirmed breakout from this sideways market as well as a break and close above $300 will be a significant step for these B shares to push towards $500 and beyond. 

I have been holding BRK.B since earlier this year. I have had to apply patience with price trading sideways for most of 2021 so far but the next breakout will be significant and when I will add further positions. 

In other words, trade less, hold more and COMPOUND. 

Zaheer Anwari - Co-founder of Sublime Trading

PS Earnings is out on Friday 5th November so will that be the catalyst to push price out of consolidation? Only time will tell...