I agree with Brons on being skeptical and watching out for fees. The economic function of a stock broker/financial advisor is to generate commissions.

FIRE YOUR BROKER!
http://www.youtube.com/user/SCOPELABS#p/u/0/oFT4c1DS7TQ

I hear what you are saying, i watched the vid and have to point out this quote about 1:20 in -

'The only reason you should hire somebody is that he is better than you at running the money'

I realise the financial advisor is either gunna make comission should i invest or charge a high hourly rate for his time, but what are my other options? I wouldn't know where to start with investing.

Seems like I should ask the advisor for a breakdown of the comissions he is charging for each investment he proposes, and I come back and post in the thread? Maybe ask for some evidence of his success rate with previous clients?

Now that Berkshire B shares are split and "affordable" is it pretty much mandatory to scoop up some of these?

I almost feel obligated to do it, holding it in my IRA for the next million years. Thoughts?

I'm on the verge of adding more to my IRA just to get as much as possible.

Hoping someone can answer quickly so I can move some money around!

Also, I see I can contribute a max of $5,000 for 2010 to my IRA.

If you own any kind of total stock market or S&P index fund, you automagically will get them. Just not direct ownership of course.

Nothing wrong with owning some BRKB. But you could also buy a diversified index ETF and own it through that.

yeah I don't have a total market/s&p type of fund.

I'm a big fan of Buffett, I think it would be cool to own some directly.

I was talking to a friend about an hour ago and he said B is a little overvalued right now according to the A shares. I think fair value was like $58.75, but he said ~$66 wouldn't be a bad place to get in.

I just transferred money into my IRA for 2010 (max) so I might wait a few days and then load up and hold for the long term.

Do you mean that the spread between A and B is too high?

At the moment B is trading at $105,656 and the B shares are trading at 70.46. Sounds reasonable to me: 105656/1500=70.43. So the B's are trading about 3 cents above the A or about 0,05%. Not too much to worry about.

He told me the A to B was 1/1800 and that was what he was basing the recommendation on.

He was wrong: http://www.berkshirehathaway.com/news/JAN2010.pdf

I guess you shouldn't listen to your friend because he a) doesn't know what he's talking about and b) he recommended buying it although it's overvalued, according to him, by 20%.

Hmm, you're right. I do listen to him because he taught me a few things back when I first met him. He moved to Chicago and worked for the CME as a trader. Now he is trading on his own, with his own money. He paid his way through college with stock/forex/futures trading and had $200k+ sitting in a savings account.

Maybe he was just misinformed, or was it ever 1/1800?

It was 1/30 first and it split to 1/1500.

General newb questions:

I'm a student who usually makes about a few thousand dollars per month playing poker ($4k in January so far of this year, but anywhere between $0 and $2k a month as the semester progresses and my volume goes down). I'd like to keep a portion of this in some kind of reasonably liquid asset. I have an e-trade banking account and am considering opening up a portfolio.

Would it make sense for me to invest a few thousand dollars into some securities? I'm not sure if the cost of trading makes it senseless to buy maybe a thousand dollars of stocks for just a few months. I'm somewhat new to this, even though I'd like to gain experience in investing.

If so, any suggestions for a reasonably risk-averse type portfolio? Since I don't know much about the market I'd rather not mess around too much.

Why are you buying?

I haven't researched enough to really be sure of anything. Should a "portfolio" of $1000 or $2000 be divided into just a few stocks? Let's say I want to buy 20 shares in Microsoft and 20 shares in Pfizer. I'm going to have to pay something like $10 commission for each different stock I buy, right? So is "diversifying" going to just eat any expected profit I would make from buying these stocks? But how risky is keeping a portfolio that scant?

With that small of a dollar amount to use, you're better off just buying an ETF like VTI (Vanguard Total Stock Market) or SPY (SPDR S&P index).

But if you're set on buying a couple stocks and holding...don't worry to much about upfront commission unless its high (5%+). On $2000 between two stocks at $1000 each at Ameritrade thats a ~2% commission. Really not that bad.

But why, what would you like to accomplish financially?

I guess I'd like to earn some kind of higher rate of return than whatever my money is making by sitting in a savings account at the bank. Perhaps more importantly I'd like to gain some kind of experience working with investments.

Let's be serious; I can barely read a ****ing balance sheet so I don't want to try anything fancy/super risky. I guess that's why I'm coming to you guys to see if you have any ideas.

Also, I don't know why I didn't think of investing in an index. It's probably the standard for people in my situation; thanks, I'm definitely looking into that.

I run a site sustaining 800-1000+ views/day. It's a blog/forum relating to several different self-help topics so a large percentage of first-time viewers become continuous subscribers. I'm hopeful it gradually turns into something as large as Steve Pavlina but that might be a bit optimistic.

Is anyone here familiar with site advertising/trackers/video ads (like Hulu) and ballpark figures for how much money they can generate?

Where 2p2 is a goldmine for poker and other areas I'd like to find something similar for websites and am hopeful someone can point me in the right direction ...

Discussing with a friend what to do with my ROTH IRA. I'm 22, have a portfolio consisting of 3 ETF funds

1 part VT
2 part VTI
2 part VWO

He's trying to tell me that I should "lock in gains" on my funds since the market appears to be headed downward. He also thinks that diversifying your portfolio is generally overated:

"Diversifying is overrated imo...everything generally moves the same direction but to a different degree"

Also:

"I think the market is much more emotional and short-term now because of better and quicker info, ability to short sell and use exotic instruments. People can make money by the market going down. People can make money off of what happens in the next 5 minutes rather than the next 5 years. Basically, there is less emphasis on long-term growth all-around imo"

I'm a buy-hold mindset investor, and I think a diversified portfolio that you sit on (unless you need to re-balance) until retirement is best. I think the friend is intelligent, but what he's saying seems absolutely stupid...am i missing something, am i the stupid one for thinking that a buy-hold diversified low cost equities mentality is best for a young person in their retirement fund?

His argument seems to be a slippery slope towards actively managing your retirement fund, and I don't know how comfortable i am with that.

He wants that you actively manage your retirement money. Imo that's dumb but people can have their opinions. There is no real or correct answer to this.

how do you feel about his assertion that buy-hold is a thing of the past?

The assertion is not true. That doesn't mean you will get magical return using buy and hold. Using the right asset allocation and staying the course are the most important principals you should use with buy and hold.

Why should buy and hold be a thing of the past?

I don't know, and i thought it a silly thing to say. He thought that since the markets are more emotionally and fast moving that buy-hold was outdated...which didn't make sense to me

Proud new owner of Berkshire B shares! Probably my favorite purchase of all time just because I'm a big fan of Warren Buffett and never thought I'd ever own a piece. 80 shares @ $73.325.

Okay, so I've googled for a bit and read as much as I can, but some of my questions are unanswered.

I understand that the U.S. Prime Rate is typically 300 basis points above the Federal Funds Rate. Why?

I mean, every website I read says the Prime rate is what banks lend to their most trustworthy customers....why is there 300 point increase? Why not 200 points or less?

And, if the increase is 300 basis points, why aren't some people getting mortgages at 3.25% interest?

Thanks,

Josh