Year to Date-BRK is up 24.66%--Why not pay yourself a dividend?
$1 million invested in BRKb at year end 2012-- would give you 11,148.272 shares because BRKB was 89.7/sh. This would give you a new market market value of $1,246,600
If every 6 months you cashed in 1% of the total market value of your BRK holdings you'd be selling $12,466 or 111.4827 worth of shares. This would reduce your original stake of 11,148.272 shares by 111.4827==giving you a new total of-- 11,037. 2373 shares. Six months from now you repeat the process.
However, if one tweaked the above by paying yourself an additional 1% anytime BRK is up more than 10% in any six month period. So this quarter you'd sell twice the shares and collect twice as much.
This would leave you with 10,925.3073 shares, worth $1,221,668. Assuming BRK is the same price six months from now- you'd pay yourself another dividend by selling 1% of your shares, thus receiving another $12,217 in cash and leaving you with just 10816.123 shares worth $1,209,451
As long as BRK continues to grow at a reasonable rate of over 7-8%, ones income will steadly rise. Twelve years ago-5/23/20001 I layed some cement and I wrote BRKA's price in the sidewalk-it was 67,800 so BRK is up $100,000 per "A" share. As bad as the last 12 years went that is still a very good return but nothing like the previous 12 years.
Obviously-the older one is, the more shares or higher percentage of shares, one should cash in.
Now I know why that in my account which is 75% BRK, it's up 25% this year. We may never see a move like this in BRK again.
Sell slowly and let it grow is my motto because our economy could actually start to rebound due to our new found oil riches and that would result in a boom for BRK.
Wouldn't even consider selling any BRK as the P/BV is still below 1.5. Stock prices tend to overshoot on both the upside and downside and we are in an upside move. Personally believe that one shouldn't even consider selling any shares until we see a P/BV of 1.8 or higher.
bizarrely - that math is almost identical to my reality... I have taken on board the web "sell 3.5%" every year,but have trimmed it to around 2%, to account for market vagaries and lean years,where other income has to pull the load more.. I shall be starting it this summer,but I like Ax's "every 6 monthsetc etc" tweak.......Holding BRK gives you your own Monte Carlo system for drawdown, and is tax friendly on the way up and down