From scalpers to Warren Buffett, all traders are clueless?

Discussion in 'Trading' started by crgarcia, Jul 6, 2007.

  1. Shawn B.

    Shawn B.

    Buffett lately can't beat the market because he IS the market...
    He's got way too much money to manage and he just can't buy small cap growth+value companies like he used to, nor does he have the time to actively manage them like he used in the 60-70ies

    To all others throwing shit at him, the only proof of knowing or not knowing in this world is facts
    He is the 2nd richest man in the world, and you are just some average guy, that's enough facts for me to believe he knows what he's doing and if somebody is wrong it's not him
    #11     Jul 7, 2007
  2. insert


    Stock Turder, I have been on ET for a long time and never placed anyone on IGNORE

    not even some of my fiery combatants

    but there is a first for everything,

    all your posts are just complete BS,

    your buy and hold and spend time on ET strategy sickens me,

    you make me vomit

    Stock Turder, you are now on Ignore.

    #12     Jul 7, 2007
  3. insert


    #13     Jul 7, 2007
  4. Sorry, as much as I like you stock, you're dead wrong on this one. He's not "missing" GOOG or AAPL. He would never look at them in the first place. He's not "out of tune with the market", he has problems finding investment opportunities that fit his style since he's simply too big. I think BRK right now sits on $40 bln in cash. With each deal he needs to deploy $5+ bln which greatly limits the universe of possibilities.

    A couple years ago, Buffet was asked what return he thinks he could produce these days if he were not limited by his sheer size. He said if he "only" had to invest $1 million he still thinks he could average 40% a year with his old arbitrage/trading style. It's still possible. Seth Klarman and Monish Pabrai are great examples. Pabrai returned something like 28% annually (that is net of his fees!) from 1999 to 2006 with no down years through one of the most vicious bear markets in history. He started in 1999 with money from friends and family at around $1 million and now runs a $500 million deep value hedge fund with hundreds of investors.

    If you knew a thing about Buffet then you'd understand he'd never invest in companies like AAPL and GOOG simply because it's next to impossible to understand how these companies will work in 10 years. If you look at the "AAPLs" and "GOOGs" (i.e. other big huge momentum tech stocks) of e.g. 1977, 1987 or 1997 you will see that many of them are delisted and bankrupt by now. The same will very likely be the case in 2017 with many of today's momo names. There is little history and certainty in their business models and industries. That doesn't mean AAPL and GOOG and the likes will all go bankrupt, it simply means the risk/reward ratio with these kind of companies - in Buffet's view - is not very favorable over the long term. Regarding XOM, instead of that he owns COP and Petrochina since years. Also he recently went into Rail stocks as a proxy for higher oil prices.

    Remember people started ridiculing Buffet many times and he has always come out on top, over 40 years. In 2000 they declared the death of value investing and Buffet was "left behind" because he "didn't understand the power of the Internet". This guy has seen all the hype, drama and frenzy of all bull and bear cycles and is still here, making more and more money for himself and his investors every decade. And I guarantee you when the next bear market wipes out many momentum addicts - which might happen tomorrow or maybe only after 5 years from now - BRK will still be here.

    Here's a 90 minute video of Buffet speaking in front of FL MBA students in case anyone is interested:
    #14     Jul 7, 2007
  5. Daal


    he made his money compouding 20% for decades, what have you done sir?
    #15     Jul 7, 2007
  6. I can see why there are so many "stock turder" haters now.
    #16     Jul 7, 2007
  7. Warren B. is now relegated to the shit heap in stocks world. That is too funny. If someone does not buy the momo stocks of the time they "suck". Stock do you consider yourself a guru?
    #17     Jul 7, 2007
  8. It seems there is someone here who doesn't understand what makes Buffett such a great investor. There are many people over the years who have had yearly returns much greater than Buffett but there are not many who have shown as much skill at consistently year after year NOT LOSING money.
    #18     Jul 7, 2007
  9. toc


    I saw one interview of Pabrai and he calls himself a 'shameless cloner' of Buffet's style. However, he also mentioned that in his main strategy they go after companies whose stock has dipped below the intrinsic value and as soon as intrinsic levels are reached they get out. This leads them to leave heaps of money on the table. However, it does make sense too as buying something for $5 which even in an open auction would start first bid at $10, is a sure shot way to $5 profit.

    Pabrai says he does not like risk or downside but is open to uncertainity.......guess what is difference between risk and uncertainity? but then investing is one big game of human psychology and philosophy. Do not get anything wrong, Fundamental investing can be easy if you have models in place that would create over and undervalued levels to be scrutinzed further as financial numbers can be 'very very deceptive' at times and then left out is to apply a little of 'trend logic' as to which sector might be hot in the next 5 years.

    Anyone trashing Buffet does not know anything about investment climate where many 'top guns' blaze for a couple of years and then get lost in the crowd of bad performers. WB has shown returns decade after decade. Peter Lynch who was highly reputed cowed out of his Magellan Fund when it reached $15B saying that it was too big. A very shrewd way to protect his name among the group of winners! Wonder how would have Lynch done if he had continued managing Magellan?

    I think a strategy for all investment climate is Undervalued-turnaround-into-Growth scenario with position being held for 2-5 years on average. Although Turnaround can be as dicey as prospective takeover or merger scenario, something that can always fizzle out at the last moment.

    Also not to forget that Pabrai runs a hedge fund which charges its 2-20% only on returns above 6%........a much more honorable way to treat investors money.
    #19     Jul 7, 2007
  10. Joab


    This is easily the STUPIDEST thing I have EVER read on ET.

    The 3rd richest man in the world :cool:
    #20     Jul 7, 2007