So B & G are short the dollar...so what?
- Thread starter ElectricSavant
- Start date
Ah. I understand. So, you wish to talk down to me rather than engage in a discussion. I wonder why that would be.
Here is one reason why it is much easier to manage small portfolios to market beating returns than large portfolios:
http://www.stanford.edu/~wfsharpe/art/active/active.htm
Or, Warren Buffett in Business Week, 1999:
"If I was running $1 million today or $10 million for that matter, I'd be fully invested. Compared to running billions, it is a huge structural advantage not to have a lot of money. "
I'm sure that's just his naivete based on his lack of significant experience, though.
Martin
Ah. I understand. So, you wish to talk down to me rather than engage in a discussion. I wonder why that would be.
-->>> I'm not talking down to you, rather, I'm pointing out that you and Buffett are being intellectually dishonest by not applying robust analysis to what you say.
Heres an example. Buffet said, "... "And, again, our usual caveat: macro-economics is a tough game in which few people, Charlie and I included, have demonstrated skill...", which is counter to making buy & hold decisions. If you dont have a long term view, why buy and hold?
Or, Warren Buffett in Business Week, 1999:
"If I was running $1 million today or $10 million for that matter, I'd be fully invested. Compared to running billions, it is a huge structural advantage not to have a lot of money. "
-->> Besides the absolute dollar values which fluctuate, being able to invest in various assett classes, through time and in relative value terms, his up/down percent remains the same regardless if its $1 or $50billion. His expenses as a function of return actually decreease as his holdings increase and his access to the best minds/deals etc increases geometrically. And, if he likes 100 shares of some company (with his 10million dollar fund analogy), shouldnt he be in love with 1,000,000 shares of it?
-->>I just find his arguments for lackluster returns faulty. But if you dig it, by all means put your dough with him.
I'm sure that's just his naivete based on his lack of significant experience, though.
-->>I didnt say hes naive, he ACTS it. I said you were naive though.
-->>> I'm not talking down to you, rather, I'm pointing out that you and Buffett are being intellectually dishonest by not applying robust analysis to what you say.
Heres an example. Buffet said, "... "And, again, our usual caveat: macro-economics is a tough game in which few people, Charlie and I included, have demonstrated skill...", which is counter to making buy & hold decisions. If you dont have a long term view, why buy and hold?
Or, Warren Buffett in Business Week, 1999:
"If I was running $1 million today or $10 million for that matter, I'd be fully invested. Compared to running billions, it is a huge structural advantage not to have a lot of money. "
-->> Besides the absolute dollar values which fluctuate, being able to invest in various assett classes, through time and in relative value terms, his up/down percent remains the same regardless if its $1 or $50billion. His expenses as a function of return actually decreease as his holdings increase and his access to the best minds/deals etc increases geometrically. And, if he likes 100 shares of some company (with his 10million dollar fund analogy), shouldnt he be in love with 1,000,000 shares of it?
-->>I just find his arguments for lackluster returns faulty. But if you dig it, by all means put your dough with him.
I'm sure that's just his naivete based on his lack of significant experience, though.
-->>I didnt say hes naive, he ACTS it. I said you were naive though.
<i>Having "a lot of money" would be a structural ADVANTAGE in a secular bull market.</i>
Why? The advantages of a small portfolio (better liquidity, lower market impact, wider investing opportunities) apply in any market.
<i>Mister Buffett has experienced two, 1949-1966 and 1982 to 2000.</i>
To summarize, your argument seems to be that Buffett went from $10,000 to $45B through purely fortuitous market timing, riding along with secular blue-chip trends, and occasionally violating his own principles. You also mention the cash flow from Geico as if it were bestowed upon him as manna from Heaven rather than the result of investment prowess. Yet none of this is sour grapes of any sort, nor tinged by envy in the slightest. Oooooookay.
Martin
Why? The advantages of a small portfolio (better liquidity, lower market impact, wider investing opportunities) apply in any market.
<i>Mister Buffett has experienced two, 1949-1966 and 1982 to 2000.</i>
To summarize, your argument seems to be that Buffett went from $10,000 to $45B through purely fortuitous market timing, riding along with secular blue-chip trends, and occasionally violating his own principles. You also mention the cash flow from Geico as if it were bestowed upon him as manna from Heaven rather than the result of investment prowess. Yet none of this is sour grapes of any sort, nor tinged by envy in the slightest. Oooooookay.
Martin
<i>Buffet said, "... "And, again, our usual caveat: macro-economics is a tough game in which few people, Charlie and I included, have demonstrated skill...", which is counter to making buy & hold decisions. If you dont have a long term view, why buy and hold?</i>
Maybe this is just my naivete, but I had this strange impression that the study of individual firms, in the short and long term, was called microeconomics. I would have said that value investing is primarily a matter of accounting and microeconomics, at best peripherally related to macroeconomics. However, I will defer to your obvious expertise in the financial industry. Perhaps I had the terms backwards.
<i>And, if he likes 100 shares of some company (with his 10million dollar fund analogy), shouldnt he be in love with 1,000,000 shares of it?</i>
For Berkshire Hathaway to deploy just 2% of its $40B in cash entails taking a position larger than the entire market capitalization of three quarters of publicly traded companies in America. For most companies that Warren Buffet might take a fancy to, even buying the company outright would fall short of a meaningful position. In any case, buying companies is far more expensive than buying shares of companies.
Even if Buffett finds an attractive value in a company sufficiently large that Berkshire can feasibly purchase a meaningful position through equities markets, buying a billion dollar position entails far higher trading costs than buying a million dollar position.
Martin
Maybe this is just my naivete, but I had this strange impression that the study of individual firms, in the short and long term, was called microeconomics. I would have said that value investing is primarily a matter of accounting and microeconomics, at best peripherally related to macroeconomics. However, I will defer to your obvious expertise in the financial industry. Perhaps I had the terms backwards.
<i>And, if he likes 100 shares of some company (with his 10million dollar fund analogy), shouldnt he be in love with 1,000,000 shares of it?</i>
For Berkshire Hathaway to deploy just 2% of its $40B in cash entails taking a position larger than the entire market capitalization of three quarters of publicly traded companies in America. For most companies that Warren Buffet might take a fancy to, even buying the company outright would fall short of a meaningful position. In any case, buying companies is far more expensive than buying shares of companies.
Even if Buffett finds an attractive value in a company sufficiently large that Berkshire can feasibly purchase a meaningful position through equities markets, buying a billion dollar position entails far higher trading costs than buying a million dollar position.
Martin
First off, guys, please learn to quote. Your posts are unreadable.
<i>In between those two points in time, that 40-fold increase is for the most part a rising tide lifts all boats in conjunction with additional continual infusions from CASH cows. Compounding. FORTY FOLD. Dig?</i>
In the same time period the S&P delivered 10 fold returns. Seems like the rising tide lifted some boats more than others.
You seem to be saying that Buffett's sucess was not properly earned because he got all these sweetheart deals, buying companies for less than they were worth, and then sat back on his laurels taking in continual infusions of cash from earnings. The thing is, that's literally the <b>textbook definition</b> of successful investing. What more do you want?
Martin
<i>In between those two points in time, that 40-fold increase is for the most part a rising tide lifts all boats in conjunction with additional continual infusions from CASH cows. Compounding. FORTY FOLD. Dig?</i>
In the same time period the S&P delivered 10 fold returns. Seems like the rising tide lifted some boats more than others.
You seem to be saying that Buffett's sucess was not properly earned because he got all these sweetheart deals, buying companies for less than they were worth, and then sat back on his laurels taking in continual infusions of cash from earnings. The thing is, that's literally the <b>textbook definition</b> of successful investing. What more do you want?
Martin
Isnt your earlier statement
..."The reason I like trading and investing, the reason I got into this business, is because it is a strict and transparent meritocracy. Good ideas are rewarded and bad ideas are punished, not subjectively but quantitatively. Everybody knows where they stand. No favoritism, no bullshit..."
wildly inconsistent with...
"You seem to be saying that Buffett's sucess was not properly earned because he got all these sweetheart deals, buying companies for less than they were worth,..." ???
Arent sweetheart deals, by definition, favoritism?
..."The reason I like trading and investing, the reason I got into this business, is because it is a strict and transparent meritocracy. Good ideas are rewarded and bad ideas are punished, not subjectively but quantitatively. Everybody knows where they stand. No favoritism, no bullshit..."
wildly inconsistent with...
"You seem to be saying that Buffett's sucess was not properly earned because he got all these sweetheart deals, buying companies for less than they were worth,..." ???
Arent sweetheart deals, by definition, favoritism?