4 ms·

This needs to be reiterated every time someone claims they made some massive financial success. If you're worse off than an S&P index fund then you're not a ge

This needs to be reiterated every time someone claims they made some massive financial success. If you're worse off than an S&P index fund then you're not a genius - you're an idiot.

loeg 8y ago
To nitpick the point a bit, there are valid and smart reasons for seeing below S&P returns. Bonds lower your returns; over the past decade, especially, foreign markets have under-performed the S&P500. You should have some idea why you're under-performing the S&P500 :-).
malux85 8y ago
This is assuming the goal is just “make money”, that’s always the sole objective function relentlessly pursued. In the last year I have met 4 billionaires - and what I have observed was that above a certain level of extreme wealth it’s not about just making more money, it’s about forfilling autonomy, mastery and purpose, which might mean a non-optimal financial strategy, but is rewarding in other ways.
rcMgD2BwE72F 8y ago
>If you're worse off than an S&P index fund then you're not a genius - you're an idiot. You aren't an entrepreneur, are you?
CPLX 8y ago
Well to be fair, someone has to actually run those 500 companies in the index.
- aliswe 8y ago
  Exactly! You can't really call Microsoft stupid for trying to run their business instead of taking all its money and putting it in an index fund. That argument is so strange
fermienrico 8y ago
“You’re an idiot” - wow, what a short sighted comment. One can invest, take risks, and fail. Doesn’t make you an idiot. Majority of startups fail. Doesn’t mean the founders are idiots.
tryptophan 8y ago
Wow. No. Its only appropriate to compare returns against the sp500 if you are taking on exactly the same amount(and type) of risk as the sp500. By this bad logic, bonds are a terrible investment and nobody should ever buy them because the s500 is better. Same goes for owning private companies, although it is murkier to see.
- asdfasgasdgasdg 8y ago
  To be fair, it seems like Dell took a larger risk than the typical S&P 500 investor. So I think it would be fair to say his performance is even worse than that naive comparison would suggest. I wouldn't necessarily characterize Dell as an idiot though. :)
- syrgian 8y ago
  That's probably his point. Bonds have less return than shares because they have less risk. A single company is always going to be riskier and more volatile than the sp500.
  - alasdair_ 8y ago
    There are many single companies with a lower beta than the sp500.
Godel_unicode 8y ago
Could it be possible that his goals included more than just "make cash pile bigger"? I would argue he got significant value out of taking the reins of his company (which bears his name) and turning it around.
solotronics 8y ago
Some of it is probably because it's something productive to do. Say you are Michael Dell and already have tens of billions of dollars. What do you do with your time? Sit around and read? A huge part of the economy of Austin is Dell and I am sure he likes being part of the action and an engine for the local economy and his employees.

This needs to be reiterated every time someone claims they made some massive financial success. If you're worse off than an S&P index fund then you're not a genius - you're an idiot.

loeg 8y ago

To nitpick the point a bit, there are valid and smart reasons for seeing below S&P returns. Bonds lower your returns; over the past decade, especially, foreign markets have under-performed the S&P500. You should have some idea why you're under-performing the S&P500 :-).

malux85 8y ago

This is assuming the goal is just “make money”, that’s always the sole objective function relentlessly pursued. In the last year I have met 4 billionaires - and what I have observed was that above a certain level of extreme wealth it’s not about just making more money, it’s about forfilling autonomy, mastery and purpose, which might mean a non-optimal financial strategy, but is rewarding in other ways.

rcMgD2BwE72F 8y ago

>If you're worse off than an S&P index fund then you're not a genius - you're an idiot. You aren't an entrepreneur, are you?

CPLX 8y ago

Well to be fair, someone has to actually run those 500 companies in the index.

aliswe 8y ago
Exactly! You can't really call Microsoft stupid for trying to run their business instead of taking all its money and putting it in an index fund. That argument is so strange

fermienrico 8y ago

“You’re an idiot” - wow, what a short sighted comment. One can invest, take risks, and fail. Doesn’t make you an idiot. Majority of startups fail. Doesn’t mean the founders are idiots.

tryptophan 8y ago

Wow. No. Its only appropriate to compare returns against the sp500 if you are taking on exactly the same amount(and type) of risk as the sp500. By this bad logic, bonds are a terrible investment and nobody should ever buy them because the s500 is better. Same goes for owning private companies, although it is murkier to see.

asdfasgasdgasdg 8y ago
To be fair, it seems like Dell took a larger risk than the typical S&P 500 investor. So I think it would be fair to say his performance is even worse than that naive comparison would suggest. I wouldn't necessarily characterize Dell as an idiot though. :)
syrgian 8y ago
That's probably his point. Bonds have less return than shares because they have less risk. A single company is always going to be riskier and more volatile than the sp500.
- alasdair_ 8y ago
  There are many single companies with a lower beta than the sp500.

Godel_unicode 8y ago

Could it be possible that his goals included more than just "make cash pile bigger"? I would argue he got significant value out of taking the reins of his company (which bears his name) and turning it around.

solotronics 8y ago

Some of it is probably because it's something productive to do. Say you are Michael Dell and already have tens of billions of dollars. What do you do with your time? Sit around and read? A huge part of the economy of Austin is Dell and I am sure he likes being part of the action and an engine for the local economy and his employees.