How about this annual compounding, like this?

Stockmarketmap said:
The Mid cap SP400 has beaten BRK-A for 20+ years ( since 1996 ) and most rolling starting points in between . In light of this, when Buffet says that investors "would do well with just investing in an index fund", he's been right. Accordingly, as one of the one of the golden rules of investing is to "not take "outsized" bets", this low odds endeavour seems to have caught up with BRK's performance stats ...
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1) Buffett aims to beat the S&P500, not the mid cap S&P 400 or the nasdaq 100 or the nikkei or the ftse100.

2) The golden rule of investing IS to take outsized bets when warranted. Probably the only way to beat the averages.
 
Visaria said:
The golden rule of investing IS to take outsized bets.
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Due to my short English, let me make sure what you write.

Did you mean proportion of each bet is much more important depending on his market decision, isn't it? To outperform over the index.
 
i mean, as with life, now and then, when you have the conviction, you have to make a big bet. If you don't you will never get anywhere. Most of Buffet's wealth comes from doing this (e.g. 40% bet on washington post etc).
 
Visaria said:
i mean, as with life, now and then, when you have the conviction, you have to make a big bet. If you don't you will never get anywhere. Most of Buffet's wealth comes from doing this (e.g. 40% bet on washington post etc).
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So you mean that maximum bet size of Buffet was 40% for the WP.
My guess was such as 10% for one big investment, since his cash is BIG.
 
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