3 ms·

I think that Buffett and other value investors will keep slipping in the net worth rankings. Value investing is out. Trend investing is in.

HenryKissinger 6y ago
It doesn't mean that trend investors make greater returns over the long term than informed investors. The NYT has a piece right now about the trading platform Robinhood and how the platform has attracted lay investors who know squat about the markets and lose more money than investors with other, more established brokers. There's a guy who took equity on his house and opened multiple lines of credit to invest with margin, made over a million, and then lost it all. Meanwhile passive investors making a cool annualized 5% above inflation will retire rich.
- eru 6y ago
  Leverage and passive investing are perfectly compatible.
eru 6y ago
> Value investing is out. Trend investing is in. Aren't you missing some possibilities?
blueblisters 6y ago
I think valuations with high PE ratios eventually become self-fulfilling prophecies for large market-caps. These companies are able to raise capital cheaply, deploy it efficiently and keep increasing their market share. With the Fed willing to pull all stops, even weak macro environment doesn't affect PE anymore.
- Dumblydorr 6y ago
  That theory works for Tesla and other legitimately innovative companies... but how many companies fail for every TSLA?
cpach 6y ago
It’s all up to one’s preferences, isn’t it? For people with moderate risk appetite and moderate expectations on ROI, value investing can make lots of sense and good returns. Especially over decades. (E.g. a 30 year old might not retire on over three decades.) I’m content if a get an average yearly return of 4-8%. Building wealth doesn’t have to be a sprint. Obviously I’m nowhere near neither Buffet’s nor Musk’s league :)

3 ms·

I think that Buffett and other value investors will keep slipping in the net worth rankings. Value investing is out. Trend investing is in.

by cryptica 6y ago

HenryKissinger 6y ago
It doesn't mean that trend investors make greater returns over the long term than informed investors. The NYT has a piece right now about the trading platform Robinhood and how the platform has attracted lay investors who know squat about the markets and lose more money than investors with other, more established brokers. There's a guy who took equity on his house and opened multiple lines of credit to invest with margin, made over a million, and then lost it all. Meanwhile passive investors making a cool annualized 5% above inflation will retire rich.
- eru 6y ago
  Leverage and passive investing are perfectly compatible.
eru 6y ago
> Value investing is out. Trend investing is in. Aren't you missing some possibilities?
blueblisters 6y ago
I think valuations with high PE ratios eventually become self-fulfilling prophecies for large market-caps. These companies are able to raise capital cheaply, deploy it efficiently and keep increasing their market share. With the Fed willing to pull all stops, even weak macro environment doesn't affect PE anymore.
- Dumblydorr 6y ago
  That theory works for Tesla and other legitimately innovative companies... but how many companies fail for every TSLA?
cpach 6y ago
It’s all up to one’s preferences, isn’t it? For people with moderate risk appetite and moderate expectations on ROI, value investing can make lots of sense and good returns. Especially over decades. (E.g. a 30 year old might not retire on over three decades.) I’m content if a get an average yearly return of 4-8%. Building wealth doesn’t have to be a sprint. Obviously I’m nowhere near neither Buffet’s nor Musk’s league :)