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No it can be skill. Was Warren Buffet and Charlie munger just lucky, year after year? Was Michael Burry of the Big Short just lucky to short the mortgage backed

No it can be skill. Was Warren Buffet and Charlie munger just lucky, year after year? Was Michael Burry of the Big Short just lucky to short the mortgage backed securities market, no he also side stepped the dot com crash and bought value stocks, recently he had very nice shorts on Kathy Woods ARKK... clearly he isn't just lucky, he has skill. I used to think I have skill yet my results were random for about a decade, then I grew a lot emotionally and in wisdom/perspective, and now I too beat the market average in both return and risk.

cj 5y ago
Quoting the original commenter: > There are people with more capital, time, and knowledge than you who will consistently beat you. Maybe you are one of those people, but the point is not everyone is good at it (the majority of people are bad at it)
cudgy 5y ago
Buffet and Munger manage the companies they buy. You, 99.99% of stock purchasers, and I are dependent on the existing management with no control over decisions companies make. Big difference.
- greedo 5y ago
  Actually they don't. They put managers in place and are largely hands off on the running of their acquisitions.
  - cudgy 5y ago
    They pick the manager and understand their personalities and backgrounds fully. That is far from hands-off.
lotsofpulp 5y ago
Buffet’s last good move was the deal he got for Goldman Sachs in 2007. Then he said he was not going to invest in tech companies because he did not invest in businesses he did not understand, then he dumped a bunch of money in IBM which obviously did terrible, then he relented and finally bought a ton of Apple in 2014 or 2015, which has single-handedly saved Berkshire and kept it relevant. I also would like to see objective proof of how well Burry has done since 2008 compared to the basically risk-less and cost-less VOO or VTI.
- christophilus 5y ago
  Apple, in absolute terms, has been his best investment (iirc). But yeah. The law of large numbers has gotten him. When you have to invest hundreds of billions, it’s impossible to keep compounding at high rates. I’d put a lot of money on Buffett beating the market if he was managing $50M.
  - lotsofpulp 5y ago
    It is possible the parameters of the world changed so much that Buffett’s expertise is not as useful as it once was.
    - christophilus 5y ago
      It’s possible. It’ll take another decade of Guy Spier and friends underperforming for me to be convinced of it.
    - JumpCrisscross 5y ago
      One of Buffett’s built-in edges is access to cheap capital through his insurance companies [1]. That matters less in a low-interest rate environment, which has been the dominant regime for the last 20 years. [1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3197185 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3197185
  - waffle_maniac 5y ago
    Better than Coke?
- HPsquared 5y ago
  These days Apple is not really a "growth" prospect developing something speculative, it's more of a "cash cow" collecting rents. The former would be the kind of "tech stock" he would avoid; the Apple of today (the latter) is the kind of predictable business Buffett does invest in.
xfitm3 5y ago
You cite emotional and wisdom/perspective growth, can you opine on that further?

cj 5y ago

Quoting the original commenter: > There are people with more capital, time, and knowledge than you who will consistently beat you. Maybe you are one of those people, but the point is not everyone is good at it (the majority of people are bad at it)

cudgy 5y ago

Buffet and Munger manage the companies they buy. You, 99.99% of stock purchasers, and I are dependent on the existing management with no control over decisions companies make. Big difference.

greedo 5y ago
Actually they don't. They put managers in place and are largely hands off on the running of their acquisitions.
- cudgy 5y ago
  They pick the manager and understand their personalities and backgrounds fully. That is far from hands-off.

lotsofpulp 5y ago

Buffet’s last good move was the deal he got for Goldman Sachs in 2007. Then he said he was not going to invest in tech companies because he did not invest in businesses he did not understand, then he dumped a bunch of money in IBM which obviously did terrible, then he relented and finally bought a ton of Apple in 2014 or 2015, which has single-handedly saved Berkshire and kept it relevant. I also would like to see objective proof of how well Burry has done since 2008 compared to the basically risk-less and cost-less VOO or VTI.

christophilus 5y ago
Apple, in absolute terms, has been his best investment (iirc). But yeah. The law of large numbers has gotten him. When you have to invest hundreds of billions, it’s impossible to keep compounding at high rates. I’d put a lot of money on Buffett beating the market if he was managing $50M.
- lotsofpulp 5y ago
  It is possible the parameters of the world changed so much that Buffett’s expertise is not as useful as it once was.
  - christophilus 5y ago
    It’s possible. It’ll take another decade of Guy Spier and friends underperforming for me to be convinced of it.
  - JumpCrisscross 5y ago
    One of Buffett’s built-in edges is access to cheap capital through his insurance companies [1]. That matters less in a low-interest rate environment, which has been the dominant regime for the last 20 years. [1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3197185 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3197185
- waffle_maniac 5y ago
  Better than Coke?
HPsquared 5y ago
These days Apple is not really a "growth" prospect developing something speculative, it's more of a "cash cow" collecting rents. The former would be the kind of "tech stock" he would avoid; the Apple of today (the latter) is the kind of predictable business Buffett does invest in.

xfitm3 5y ago

You cite emotional and wisdom/perspective growth, can you opine on that further?