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> Someone who would have invested in Microsoft 20 years ago and said "Hey, I am sure software will grow like mad! That's enough for me to know about the markets
by zone411 3y ago
> Someone who would have invested in Microsoft 20 years ago and said "Hey, I am sure software will grow like mad! That's enough for me to know about the markets. From now on, all I will do is wait." would have been right. And would have seen about twice the return that Berkshire achieved. There must be many such investors. Are they all "better" than Munger and Buffett?
Using overall return as the sole comparison metric isn't really done when comparing managers. You can look at factors such as diversification, Sharpe and Sortino ratios, drawdowns...
- mg 3y agoDepends on who does the comparison. And what is important to them. The Microsoft investor might say "I'm fine with the price going up and down a bit in the short term. Reducing that is not worth it for me to miss out on 50% of the ROI". If you say Berkshire's performance is significantly exceptional when including those aspects in a combined performance indicator, then it is up to you to show that.