That doesn't make sense when hedge funds can go long, short, buy/sell options and trade commodities totally unrelated to the stock market. And if you look at the returns of various funds, the results vary widely. Overall they're not impressive, though. I suspect the same is true of the average ET trader.
I don't think its a moot point, it's about diversification v concentration in terms of risk/return. If you pick the right stocks in a given environment you can considerably out-perform the market with a similar risk profile to investing in an index and it's easier to understand those few stocks than it is a heavily diversified portfolio.
That's great in theory, but almost impossible long-term in practice. But you can chase that dream if you want...
Warren has said he guaranties he could make 50% per annum if he traded far smaller size. I believe he means what he says regarding diversication,at least intheory
Anything Buffett has said in the past 10-20 years is going to be more like "do as I say not as I do" because his AUM is so gigantic that he is very limited in what he can invest in. When he was coming up he used to do a lot in penny stocks, for instance. Now he's got KO etc.
Wonderful. Go manage a fund, beat the market for 10+ years and write a book about it. Like a lot of people here, you seem to underestimate how hard this game is by a long shot. And your question re: Amazon and Buffett shows you don't know much about him. But don't let that stop...go make a killing if you can! apparently it's easy...It makes me wonder why you need to start newbie-ish threads on ET, though.
50% only possible because Warren is Warren and he's got all these private deals going across his desk every day... if he goes on the public market he will do no better than the IWM, just like he has market performed the SPY for a long while.. the so called 'value investing' edge is long gone... but people are still blinded by Warren's aura... granted there is still stuff that we can learn from Warren - the long term mindset, the risk tolerance.... but in terms of outperforming the market... forget it... the stock picking stuff is nothing more than portfolio123.com for $100/year... and you can check how the folks are performing over there. we have gone way past the ages of finding company value based on some fundamental metrix with linear growth of the consumer industry..... the past 20 years, and the next few decades, it's all about technology with computer speed doubling every 18 month, exponential growth, burn cash to grab market share, big data.. even Warren is slowly waking up to this fact and finally bought ibm and apple, the most safe looking technology companies lol... but his time is way off because of his way of thinking... by the time these companies morph into some kind of 'solid cash flow generator', ironically the exponential growth component would have died within the company..
I don't believe him...unless he means insider trading which he did IMO around the financial crisis...the way he cheerleaded the markets and crafted legislation that benefited him. If you do it ethically, the micro/penny stock game is much harder and competitive now than it was in the 1960s.