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Not that I disagree with you (although I think you may have misinterpreted EMH) but your argument is structurally identical to saying, "What if the odds of winn

by jvm 11y ago

Not that I disagree with you (although I think you may have misinterpreted EMH) but your argument is structurally identical to saying, "What if the odds of winning the lottery aren't so long after all? Lottery winners might beg to differ!"

bcg1 11y ago
You could be right, but I don't consider investing to be the same as the lottery. Buffett and Rogers consistently beat the market, year after year, decade after decade. The Quantum Fund (started by Jim Rogers and George Soros) had a 3365% return in the 70's, while the S&P 500 returned 47% (http://www.streetstories.com/James_Rogers.htm http://www.streetstories.com/James_Rogers.htm). Rogers also bet against Black Monday in 1987, wrote about the housing bubble and 2008 financial crisis as early as 2004 in his book "Hot Commodities", and called the collapse of the gold price in 2012 as well as the recent epic dollar rally. "Why do you think the same five guys make it to the final table of the World Series of Poker EVERY YEAR? What, are they the luckiest guys in Las Vegas?" (http://www.imdb.com/title/tt0128442/quotes?item=qt0379517 http://www.imdb.com/title/tt0128442/quotes?item=qt0379517) You could be right and my understanding of EMH might be off base... but if all information was "priced in" I can't understand how such individuals could consistently be "right" when the broader market is "wrong".
- throwawaymsft 11y ago
  Yes, it's strange that people think stock market investing is purely a game of chance. The reasoning is typically "A winning strategy would be universally communicated, adopted, executed, and priced out." Which is a strange way to think. Go is a popular strategy game. Strategies that work should be encoded into computer algorithms and "priced out". Yet computers can't beat the best human Go players. Are the best human Go players simply lucky: they have no true strategy, and it's chance when they win? (Hint: not every strategy is easily encoded into a deterministic algorithm. Expert human insight and judgment, that finicky beast, is not yet replicable by machines.)
- wstrange 11y ago
  Buffet is far more than an investor. He takes a large enough position to have considerable influence over how his companies are run. That kind of clout isn't available to most of us.
  - bcg1 11y ago
    True, that's a good point.
  - eru 11y ago
    Not only is he influencing management, he's also doing a good job at it.
- jvm 11y ago
  "Buffett and Rogers consistently beat the market, year after year, decade after decade." Berkshire Hathaway has not beaten the market since before 2008[1], marking 8 solid years of alpha=0. [1] http://imgur.com/gallery/Gnnp4Ym/new http://imgur.com/gallery/Gnnp4Ym/new
  - hchenji 11y ago
    Is BRK.A overpriced just like BRK.B?
  - airza 11y ago
    This graph looks like they destroyed the market in 2014, though this is not my area of expertise.

by jvm 11y ago

bcg1 11y ago

You could be right, but I don't consider investing to be the same as the lottery. Buffett and Rogers consistently beat the market, year after year, decade after decade. The Quantum Fund (started by Jim Rogers and George Soros) had a 3365% return in the 70's, while the S&P 500 returned 47% (http://www.streetstories.com/James_Rogers.htm http://www.streetstories.com/James_Rogers.htm). Rogers also bet against Black Monday in 1987, wrote about the housing bubble and 2008 financial crisis as early as 2004 in his book "Hot Commodities", and called the collapse of the gold price in 2012 as well as the recent epic dollar rally. "Why do you think the same five guys make it to the final table of the World Series of Poker EVERY YEAR? What, are they the luckiest guys in Las Vegas?" (http://www.imdb.com/title/tt0128442/quotes?item=qt0379517 http://www.imdb.com/title/tt0128442/quotes?item=qt0379517) You could be right and my understanding of EMH might be off base... but if all information was "priced in" I can't understand how such individuals could consistently be "right" when the broader market is "wrong".

throwawaymsft 11y ago
Yes, it's strange that people think stock market investing is purely a game of chance. The reasoning is typically "A winning strategy would be universally communicated, adopted, executed, and priced out." Which is a strange way to think. Go is a popular strategy game. Strategies that work should be encoded into computer algorithms and "priced out". Yet computers can't beat the best human Go players. Are the best human Go players simply lucky: they have no true strategy, and it's chance when they win? (Hint: not every strategy is easily encoded into a deterministic algorithm. Expert human insight and judgment, that finicky beast, is not yet replicable by machines.)
wstrange 11y ago
Buffet is far more than an investor. He takes a large enough position to have considerable influence over how his companies are run. That kind of clout isn't available to most of us.
- bcg1 11y ago
  True, that's a good point.
- eru 11y ago
  Not only is he influencing management, he's also doing a good job at it.
jvm 11y ago
"Buffett and Rogers consistently beat the market, year after year, decade after decade." Berkshire Hathaway has not beaten the market since before 2008[1], marking 8 solid years of alpha=0. [1] http://imgur.com/gallery/Gnnp4Ym/new http://imgur.com/gallery/Gnnp4Ym/new
- hchenji 11y ago
  Is BRK.A overpriced just like BRK.B?
- airza 11y ago
  This graph looks like they destroyed the market in 2014, though this is not my area of expertise.