Only a Market Crash Can Stop Warren Buffett From Winning This $1 Million Bet

murray t turtle · Feb 27, 2017

Stymie said:
Investors don't understand the real cost of execution and the major drag when having to pay someone else to do the trading for you. This even ignores the tax implications of short-term gains tax versus long-term positions which have capital gains but have not been sold thus no tax paid yet. This allows the compounding of returns to grow exponentially without a tax advisor.

The hard question is if we can all see the obvious answer, why do people(we) still want to day trade and be a victim of the obvious outcome? Are people so short sighted that a winning day becomes expolated out and the assumption becomes that they are the exception?
Is this just a convenient casino venue which is an extension of our desk and provides a bit of excitement to burn the edges of the nest egg? Are we just programmed to inflict self harm?

Warren suggest that rich people look for a venue which is not accessible to the average investor because they feel they deserve something different and hopefully better. Why doesn't everyone just give their money to Warren given his incredible track record? The AGM has over 40,000 people attending each year, so the world's largest AGM does suggest that there is a smart group of people who just hand the money over to him. But what about the rest of the world?
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Good points. Answer on your question-- maybe because Mr Buffet himself has said he does NOt expect to duplicate his past performance because of his size. Great quotes ''Predicting rain does not count; building arks does''-WB quote

Chuck Krug · Feb 28, 2017

I think this bull market is getting a bit long in the tooth.

Visaria · Feb 28, 2017

Why?

Chuck Krug · Feb 28, 2017

Fundamental: High P/E, raising intrest rate environment
Technical: Extended from 200d MA, no pullback, Blowoff top behaviour

Visaria · Feb 28, 2017

Expect 3000 on sp500 myself this year.

Humpy · Feb 28, 2017

When Trump's stupid policies kick in expect the S&P 500 to drop below 2,000 imho

java · Feb 28, 2017

Humpy said:
When Trump's stupid policies kick in expect the S&P 500 to drop below 2,000 imho
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Why? What policies?

Chuck Krug · Feb 28, 2017

Visaria said:
Expect 3000 on sp500 myself this year.
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Could be, I hold between 2 mins and 2 days, so it's just conversation for me. But it all feels kinda frothy here.

ironchef · Mar 1, 2017

Stymie said:
Investors don't understand the real cost of execution and the major drag when having to pay someone else to do the trading for you. This even ignores the tax implications of short-term gains tax versus long-term positions which have capital gains but have not been sold thus no tax paid yet. This allows the compounding of returns to grow exponentially without a tax advisor.

The hard question is if we can all see the obvious answer, why do people(we) still want to day trade and be a victim of the obvious outcome? Are people so short sighted that a winning day becomes expolated out and the assumption becomes that they are the exception?
Is this just a convenient casino venue which is an extension of our desk and provides a bit of excitement to burn the edges of the nest egg? Are we just programmed to inflict self harm?

Warren suggest that rich people look for a venue which is not accessible to the average investor because they feel they deserve something different and hopefully better. Why doesn't everyone just give their money to Warren given his incredible track record? The AGM has over 40,000 people attending each year, so the world's largest AGM does suggest that there is a smart group of people who just hand the money over to him. But what about the rest of the world?
More...

Because we hope and we dream.

And there are many truly skillful day traders among us.

murray t turtle · Mar 3, 2017

JackRab said:
I posted something similar in a different thread...

On average, Hedgefunds have the tendency to not make a lot of money, because they either trade against long-term-buy-hold AND against themselves.
The against themselves part means that that bit is a zero-sum game.... One HF buys, the other sells short... both together don't make anything... they actually lose on fees etc.

So in a bull market, WB will always outperform the total/average HF. And since I don't think there has been a 10 year bear market... or a bear market without a decent bull market as follow-up in a 10 year period, that's just a dumb bet to take for the HF or whoever was at the other side of the Buffet-bet.
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Good points JR; but since WB tends to be above average. I would have liked Jack Schwager to pick some above average hedge funds to compete.Congrats to Mr Buffets pick --Vanguard winner most likely-SPY related . And since we have had several 3 year/+ bear markets[1929...2000], not likely hedge funds will suffer to much on that contest, even if they lose.