Should I be investing in SEQUX

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Latro
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Should I be investing in SEQUX

Postby Latro » Mon Apr 23, 2007 9:00 am

My Grandfather ran a Boys Club in Omaha Nebraska through the 60's, 70's, and 80's and while he was there often became friends with philanthropists that donated money to help keep the Boys Club running.

He became friends with Warren Buffett who understood that my grandfather was giving a lot to the Boys he was helping but wasn't providing much for a way of his own retirement or future. I've been told that Mr. Buffett advised my Grandfather to purchase as many shares as he could in a Mutual Fund called Sequoia. Sequoia was putting about 30% of its assets into Berkshire Hathaway and would be something that would help my Grandfather retire. My Grandfather followed Mr. Buffett's advice and because of it developed an estate worth over $1 million.

Sequoia is currently a closed mutual fund that requires you to have a share or be given a share to be able to start purchasing additional shares in the fund. I was given 1 share by my Grandfather when he passed away and I'm wondering if I should continue to follow Mr. Buffett's 30 year old advice and invest my savings in this fund?

My gut is telling me yes... So let me know if you think of anything else I should consider when making my decision.

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JerichoHill
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Postby JerichoHill » Mon Apr 23, 2007 10:33 am

I think Buffett has a proven enough track record to warrant a yes.
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Postby nickel » Mon Apr 23, 2007 10:45 am

Aside from 30 year old advice (albeit from an investing genius) and the fact that the fund is closed to new investors (suggesting that it's doing something right), what else do you know about this fund?

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Postby Latro » Mon Apr 23, 2007 11:32 am

It produces dividends usually twice a year... This last October it was about $16 a share... not much for me with 1 share...

It still has about 30% invested in Berkshire Hathaway and then the rest of the fund follows the Buffett philosophy for investments.

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Postby nickel » Mon Apr 23, 2007 11:35 am

Latro wrote:It produces dividends usually twice a year... This last October it was about $16 a share... not much for me with 1 share...

It still has about 30% invested in Berkshire Hathaway and then the rest of the fund follows the Buffett philosophy for investments.


The dollar amount for the dividend doesn't mean much without knowing share price. But anyway, my main question had to do with it's overall performance vs. the market, expense ratio, etc.

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Postby Latro » Mon Apr 23, 2007 12:13 pm

Lets see.. expense ratio is 1%

It looks like its lagged a bit behind the S&P 500 the past year but still has a good show for long term investments.

Here is additional details on the fund.

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Postby JerichoHill » Mon Apr 23, 2007 12:16 pm

If its based on Buffett's investment strategy, then don't concern yourself with 1-yr performance. I care about 10yr or 20yr benchmarks.

I would be salivating if this deal was offered to me
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Re: Should I be investing in SEQUX

Postby tinyhands » Mon Apr 23, 2007 7:18 pm

Latro wrote:I'm wondering if I should continue to follow Mr. Buffett's 30 year old advice and invest my savings in this fund?

I don't think you've given us enough information to help you make your decision. What kind of shape is your portfolio in? How does this investment fit in with the other investment types in your portfolio and how big of a stake do you plan on making? How does this investment fit in with the goal(s) you've set for your portfolio and what's your exit strategy?

Anybody can type in a ticker symbol and ask if they should buy some. I think a serious investor should be looking at his overall portfolio to determine whether an investment is appropriate for him or her.

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Postby Latro » Mon Apr 23, 2007 8:38 pm

I'll give a bit more detail. This would be a long term savings investment that I'm thinking of contributing funds continually. I have a sweet 401k program with my employer where they give me 10% of my salary each year. Its not a match, they actually just give me the value in the investment options inside our 401K.

My thought is to use SEQUX as additional savings investment that we have outside of my employer. I'm 25 years old and starting to look more into investing, but everything would be long term 30+ years.

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Postby tinyhands » Tue Apr 24, 2007 8:25 am

Ok, so it sounds like you essentially want to build your taxable brokerage account and invest it in this fund. But do you have an IRA and is it fully funded? You say that you want to invest long-term, but the best way (caveat: for most people) to do that is in a tax-deferred account such as an IRA or your 401k.

Assuming for a moment that you do have fully-funded retirement account(s) and taxable savings is the next logical choice: Does a large-cap, financial services sector mutual fund fit in with your other investments (see also: diversification) or does it leave you with too many eggs in one basket?

If you think I'm against making this investment, you're only partially right. I'm just concerned (based on what you haven't said) that you're not looking at the big picture and that you're trying to become a stock-picker (fund-picker). I think there are probably better ways for you to invest your money and that, after you've done everything else, an investment such as this probably shouldn't comprise more than about 10% (aka "mad money") of your overall portfolio.


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