Author Topic: Be fearful when others are greedy  (Read 4813 times)

Kroaler

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Be fearful when others are greedy
« on: May 18, 2020, 08:43:17 AM »
Idk about you guys, but all of a sudden everyone around me is a stock market guru buying anything and everything during the covid dip. Everyones got tips on what's hot.

Meanwhile Warren Buffet seems to be sitting on cash in satisfied with what options are available.

This has got to be some kind of sign. How do you interpret this? Seems like everyone is pretty greedy right now.

UnleashHell

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Re: Be fearful when others are greedy
« Reply #1 on: May 18, 2020, 09:29:27 AM »
Seems like everyone is pretty greedy right now.
if everyone was being greedy wouldn't the S&P be breaking new records? It currently still 10% from its high. I think you are taking one quote to its extreme and misreading the market at the same time.

ChpBstrd

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Re: Be fearful when others are greedy
« Reply #2 on: May 18, 2020, 09:42:34 AM »
Thereís a gauge for investor greediness:

https://money.cnn.com/data/fear-and-greed/

Iíd say markets being only 10% down in the face of 20% unemployment*, which is worse than the Great Depression, is pretty bold, if not greedy.

* https://www.forbes.com/sites/shaharziv/2020/05/10/dont-be-fooled-by-official-unemployment-rate-of-147-the-real-figure-is-even-scarier/

Stimpy

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Re: Be fearful when others are greedy
« Reply #3 on: May 18, 2020, 09:46:36 AM »
Idk about you guys, but all of a sudden everyone around me is a stock market guru buying anything and everything during the covid dip. Everyones got tips on what's hot.

Meanwhile Warren Buffet seems to be sitting on cash in satisfied with what options are available.

This has got to be some kind of sign. How do you interpret this? Seems like everyone is pretty greedy right now.
I tend to agree with Buffet, however, remember he has a lot a cash, and no "Elephants" worth buying.   ie, no one is so cheap and screwed it's worth acquiring. 

That does not mean that there are not smaller opportunities out there.  Just nothing that's large enough to warrant what Buffet is looking for. 

I personally have made only a few purchases beyond my usual indexing.  And of those, one was adding to a position, and the other was to replace a stock I sold per my rules.  Outside indexing, I would advise caution, but as one particular value investor says: "the Stock market is a market of stocks and not a stock market."  So use your best judgement.   

Or ignore all that noise and index, like you should be doing.

vand

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Re: Be fearful when others are greedy
« Reply #4 on: May 18, 2020, 10:45:59 AM »
The joke is that as Buffett's ability to outperform the market has disappeared, so every Tom Dick & Harry seems to  increasingly think that he has magical insight on where the market is likely to go.

Would you listen to anyone off the street for investment advice if they told you they were buying the S&P at 3000+ but sold it at below 2700? Everyone knows that in order to make money you buy low and sell high.

And yet we had Berkshire buying back its own shares over the last few years, and then as we saw the most savage decline in the last 11 years Buffett sold into it.. he literally bought high and sold low. No wonder Berkshire is underperforming so miserably. 



ice_beard

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Re: Be fearful when others are greedy
« Reply #5 on: May 18, 2020, 11:03:43 AM »
https://www.marketwatch.com/story/dud-stock-picks-bad-industry-bets-vast-underperformance-its-the-end-of-the-warren-buffett-era-2020-05-14?mod=article_inline

Granted this is an opinion piece, I have to agree.  Vanguard does not rate brk.b as even a hold right now (it's overweight).  I can understand why he doesn't want to buy, he's considered everything too expensive and over-valued.  Except over-leveraged shale oil companies I guess (OXY).  Some of his picks just have not been good and/or are not aging well.   




GoCubsGo

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Re: Be fearful when others are greedy
« Reply #6 on: May 18, 2020, 11:19:46 AM »
It's interesting. This is the first true "stock pickers/active investor" market in what seems to me a long time (December 2018 was a great month personally for me because I loaded up on tech that fell for little reason).  I know we mostly advocate buy and hold indexes on this forum, but this market felt different to me.  Definite winners and losers.

I've been jumping in and out of positions for the past 2 months.  Mostly mega cap tech and momentum plays.  I've done this with roughly 25% of my portfolio.  I was doing this mostly out of boredom (lot's of time to read analyst report, pundits, etc) and as a challenge to myself to test my risk tolerance.  So far so good.  I will definitely go back to boring index investing at some point but the wild extremes of these past few months have been a lot of fun.  Picking up 30% in gains in a week on a stock wouldn't even have been in the realm of thought six months ago for me.  Now it's totally doable.  Not advocating.  Just throwing in my 2 cents that buying and selling short term in this market has kept me sane more than being about pure greed.

MustacheAndaHalf

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Re: Be fearful when others are greedy
« Reply #7 on: May 18, 2020, 11:46:20 AM »
Meanwhile Warren Buffet seems to be sitting on cash in satisfied with what options are available.
"Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.B), wasn't doing much buying during the first quarter, which ended just before the economic impact of the coronavirus really set in. But he sure did a lot of selling."
https://finance.yahoo.com/news/21-stocks-warren-buffett-selling-141851514.html


The joke is that as Buffett's ability to outperform the market has disappeared, so every Tom Dick & Harry seems to  increasingly think that he has magical insight on where the market is likely to go.

Would you listen to anyone off the street for investment advice if they told you they were buying the S&P at 3000+ but sold it at below 2700?  ...
Before today's rally, the S&P 500 was down -9% YTD.  So every investor who started the year invested in the S&P 500 and stayed invested, is also down -9%.  If Buffet lost -10%, he's very close to the market return right now.

Berkshire Hathaway has a market cap of over $400 billion, and has an estimated $130 billion in cash.  When he invests, he needs to be careful about going above 5% ownership (see below).  When Buffet invests $10 billion, he needs to pick a company with a market cap over $200 billion.  Take a look the first page of Vanguard's S&P 500 portfolio holdings.  Entries #25 - #30 are NVidia (218B), Coca Cola (193B), Chevron (173B), Walmart (360B), Adobe (179B).  If Buffet wants to invest $10 billion and keep under 5% ownership, he has lees than 30 choices.
https://investor.vanguard.com/etf/profile/portfolio/VOO/portfolio-holdings

(5% ownership)
"When a person or group of persons acquires beneficial ownership of more than 5% of a voting class of a companyís equity securities registered under Section 12 of the Securities Exchange Act of 1934, they are required to file a Schedule 13D with the SEC."
https://www.sec.gov/fast-answers/answerssched13htm.html

Body Surfer

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Re: Be fearful when others are greedy
« Reply #8 on: May 18, 2020, 11:52:01 AM »
OP- I agree with you, the present market values are overly optimistic IMHO. I fear the market is going to be sideways for awhile- with small % gains over a long time frame.

I personally would feel better about the current market if the S&P were 10-15% lower. From that point I'd have more faith in a new bull market beginning with sustained % gains.

waltworks

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Re: Be fearful when others are greedy
« Reply #9 on: May 18, 2020, 12:06:11 PM »
If there's ever a situation where you should do the opposite of what Yoda says, it's investing.

Don't trust your feelings. You're an animal evolved to be SUPER fearful of losses (you value losses about double what you value gains). So if you feel the market is too risky/overvalued - you're probably better off not watching any more financial news and just investing as always. Because following your feelings is just going to keep you out of the market during good times as well as bad, and that means in the end you lose.

-W

vand

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Re: Be fearful when others are greedy
« Reply #10 on: May 18, 2020, 12:10:34 PM »

The joke is that as Buffett's ability to outperform the market has disappeared, so every Tom Dick & Harry seems to  increasingly think that he has magical insight on where the market is likely to go.

Would you listen to anyone off the street for investment advice if they told you they were buying the S&P at 3000+ but sold it at below 2700?  ...
Before today's rally, the S&P 500 was down -9% YTD.  So every investor who started the year invested in the S&P 500 and stayed invested, is also down -9%.  If Buffet lost -10%, he's very close to the market return right now.

Berkshire Hathaway has a market cap of over $400 billion, and has an estimated $130 billion in cash.  When he invests, he needs to be careful about going above 5% ownership (see below).  When Buffet invests $10 billion, he needs to pick a company with a market cap over $200 billion.  Take a look the first page of Vanguard's S&P 500 portfolio holdings.  Entries #25 - #30 are NVidia (218B), Coca Cola (193B), Chevron (173B), Walmart (360B), Adobe (179B).  If Buffet wants to invest $10 billion and keep under 5% ownership, he has lees than 30 choices.
https://investor.vanguard.com/etf/profile/portfolio/VOO/portfolio-holdings

(5% ownership)
"When a person or group of persons acquires beneficial ownership of more than 5% of a voting class of a companyís equity securities registered under Section 12 of the Securities Exchange Act of 1934, they are required to file a Schedule 13D with the SEC."
https://www.sec.gov/fast-answers/answerssched13htm.html

Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.

« Last Edit: May 18, 2020, 12:14:03 PM by vand »

MustacheAndaHalf

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Re: Be fearful when others are greedy
« Reply #11 on: May 18, 2020, 12:23:31 PM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

vand

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Re: Be fearful when others are greedy
« Reply #12 on: May 18, 2020, 12:50:09 PM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.

ChpBstrd

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Re: Be fearful when others are greedy
« Reply #13 on: May 18, 2020, 01:19:48 PM »
Something I took for granted prior to the past 5 months is how hard it is to go against the herd for a long period of time.

Itís easy to look back at a graph of the 2000, 2007 or the 1930s timeframe and say ďI would have known to sell here and buy thereĒ but for people living in real time, the experience of making the correct moves would have looked like being dramatically wrong for months, even years, all while being harassed by worries of being wrong. The same is true for the many deep, but temporary, corrections throughout history. Bear traps or passing corrections of 3-12 months were common, and to maintain the correct course one would have to wake up every day for a very long time and observe over and over again that oneís ďinvestment thesisĒ was not panning out.

One reaction to this is to vow never to market time. But that approach would have forced you to hold a tech heavy portfolio going into 2000, or an oil heavy portfolio going into 2008. There is no certainty, not even in B&H.

Stimpy

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Re: Be fearful when others are greedy
« Reply #14 on: May 18, 2020, 01:20:06 PM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
Be careful putting the performance of BRK to the performance of Buffet.  He may own it, but that does not mean that the BRK stock correlates to the stocks of the companies he owns.

Having said that yes, he has not beaten the snp 500 in a while, part of that, I believe, is he has his eyes else where.  He no longer is the main buyer/seller at brk, and as I understand it is not putting as much in has he use to.  This isn't to say he isn't active or working, just that he is getting old and has other things on his mind.  (Who can blame him.)

The other parts are the value of the market as a whole, and the fact he has all the money....  (as explained in other posts above.)

Buffaloski Boris

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Re: Be fearful when others are greedy
« Reply #15 on: May 18, 2020, 03:49:15 PM »
My interpretation: the US stock market is very pricey. As it was in February, as it was in 2019. If you wish to own US equities youíll pay more for them. Trailing PE  for SP 500 is 21+, forward PE is 21+ílast I saw. Seems like a lot of folks settling for very low premiums for risky assets. Thatís fine. There are better deals out there. At least for me.

AdrianC

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Re: Be fearful when others are greedy
« Reply #16 on: May 18, 2020, 05:50:33 PM »
Why is the market acting so weird?

Exhibit A:
I've been jumping in and out of positions for the past 2 months.  Mostly mega cap tech and momentum plays.  I've done this with roughly 25% of my portfolio.  I was doing this mostly out of boredom (lot's of time to read analyst report, pundits, etc) and as a challenge to myself to test my risk tolerance.  So far so good.  I will definitely go back to boring index investing at some point but the wild extremes of these past few months have been a lot of fun.  Picking up 30% in gains in a week on a stock wouldn't even have been in the realm of thought six months ago for me.  Now it's totally doable.  Not advocating.  Just throwing in my 2 cents that buying and selling short term in this market has kept me sane more than being about pure greed.

GoCubsGo, more power to ya. Hope it works out.

Times this by all those hundreds of thousands of bored-at-home peeps, no sports to bet on, no casinos open, taking advantage of them free stock trades, and we might get the market we have got.

It feels like 1999 to me. I remember going to a client's site and all the techs were crowded around the one internet connected PC they had, watching the stocks prices of JDS Uniphase, Intel, Dell, etc. They all thought they were investing geniuses. Until they weren't. I assume some got out in time.

Buffaloski Boris

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Re: Be fearful when others are greedy
« Reply #17 on: May 18, 2020, 07:58:43 PM »
It feels like 1999 to me. I remember going to a client's site and all the techs were crowded around the one internet connected PC they had, watching the stocks prices of JDS Uniphase, Intel, Dell, etc. They all thought they were investing geniuses. Until they weren't. I assume some got out in time.

Now that you mention it, it does feel very dotcom bubble-ish. But without the reasonably good outside economy. Some people made a lot of money. For awhile.

MustacheAndaHalf

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Re: Be fearful when others are greedy
« Reply #18 on: May 19, 2020, 12:49:46 AM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
That's incorrect.  Where are you getting your data?
Portfolio visualizer shows a performance difference of 1.1% per year, with a gap of just 9.7% from 2010 - 2019.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2010&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1_1=100&symbol2=VOO&allocation2_2=100

Kroaler

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Re: Be fearful when others are greedy
« Reply #19 on: May 19, 2020, 06:59:02 AM »
Why is the market acting so weird?

Exhibit A:
I've been jumping in and out of positions for the past 2 months.  Mostly mega cap tech and momentum plays.  I've done this with roughly 25% of my portfolio.  I was doing this mostly out of boredom (lot's of time to read analyst report, pundits, etc) and as a challenge to myself to test my risk tolerance.  So far so good.  I will definitely go back to boring index investing at some point but the wild extremes of these past few months have been a lot of fun.  Picking up 30% in gains in a week on a stock wouldn't even have been in the realm of thought six months ago for me.  Now it's totally doable.  Not advocating.  Just throwing in my 2 cents that buying and selling short term in this market has kept me sane more than being about pure greed.

GoCubsGo, more power to ya. Hope it works out.

Times this by all those hundreds of thousands of bored-at-home peeps, no sports to bet on, no casinos open, taking advantage of them free stock trades, and we might get the market we have got.

It feels like 1999 to me. I remember going to a client's site and all the techs were crowded around the one internet connected PC they had, watching the stocks prices of JDS Uniphase, Intel, Dell, etc. They all thought they were investing geniuses. Until they weren't. I assume some got out in time.

Maybe that's what it is.  Maybe everyones at home gambling on the stock market.

Greystache

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Re: Be fearful when others are greedy
« Reply #20 on: May 19, 2020, 07:23:58 AM »
I don't understand the current market. The only reason to buy into this market at these prices is the old saying, "Don't fight the Fed". The federal reserve and the federal government have displayed a willingness to spend and unlimited amount of our grandchildren's money to prop up this market.

waltworks

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Re: Be fearful when others are greedy
« Reply #21 on: May 19, 2020, 07:56:23 AM »
Newsflash: NOBODY "understands" the market in the short or even medium term. It's the aggregate judgement of a bunch of random emotional animals plus a few incomprehensible algos/future robot overlords. It is inherently not understandable.

Over the long term, it tends to go up.

Invest accordingly.

-W

GoCubsGo

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Re: Be fearful when others are greedy
« Reply #22 on: May 19, 2020, 09:16:41 AM »
I lived through the dot com crash and totally remember guys sitting around at work trading "stock tips".  Pure unadulterated gambling by 99% of those guys haha.  There were two separate stock clubs in my large company (remember those anyone?).  I was young and didn't have any money but I do remember the dumbest sales guy in our office was the ringleader of the stock club.  It ended poorly.

I guess I made the realization that the market makes zero sense on fundamentals but that a LOT of money was pouring into the same type stocks --Huge balance sheets, technology based, and will gain from or at the very least not be too impacted by COVID.  Combined with Fed help, I felt like I wouldn't get crushed too bad.

I will say the slight difference between now and 2000 is that there is wealth of data and knowledge that is much more accessible nowadays.  Still risky but at least I can be somewhat more informed.   Now that I'm up on the year overall, I will take a bunch off the table in regards to tech stocks/COVID plays.  My fear is I will get bored again.  Maybe start hunting those beat up value stocks.....

Brother Esau

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Re: Be fearful when others are greedy
« Reply #23 on: May 19, 2020, 10:00:47 AM »
Be greedy when others are fearful.

AdrianC

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Re: Be fearful when others are greedy
« Reply #24 on: May 19, 2020, 11:50:48 AM »
Article:
Have the Record Number of Investors in the Stock Market Lost Their Minds?
https://www.newyorker.com/news/our-columnists/have-the-record-number-of-investors-in-the-stock-market-lost-their-minds

vand

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Re: Be fearful when others are greedy
« Reply #25 on: May 19, 2020, 12:44:42 PM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
That's incorrect.  Where are you getting your data?
Portfolio visualizer shows a performance difference of 1.1% per year, with a gap of just 9.7% from 2010 - 2019.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2010&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1_1=100&symbol2=VOO&allocation2_2=100

Dividends, innit.

waltworks

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Re: Be fearful when others are greedy
« Reply #26 on: May 19, 2020, 12:50:27 PM »
Article:
Have the Record Number of Investors in the Stock Market Lost Their Minds?
https://www.newyorker.com/news/our-columnists/have-the-record-number-of-investors-in-the-stock-market-lost-their-minds

There were 3 times as many *trades* this April as last April. That means nothing about the number of people investing/entering or exiting the market.

I'd expect higher trading volume during a time of uncertainty/volatility. To be honest, it would be pretty surprising if that *weren't* the case.

Note that I'm not saying anything about how the market is valued (IMO, over) or the general economy (IMO, bad). But the author's point is not supported by his golf anecdote or the data particularly.

-W

Jack0Life

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Re: Be fearful when others are greedy
« Reply #27 on: May 19, 2020, 11:46:26 PM »
It's interesting. This is the first true "stock pickers/active investor" market in what seems to me a long time (December 2018 was a great month personally for me because I loaded up on tech that fell for little reason).  I know we mostly advocate buy and hold indexes on this forum, but this market felt different to me.  Definite winners and losers.

I've been jumping in and out of positions for the past 2 months.  Mostly mega cap tech and momentum plays.  I've done this with roughly 25% of my portfolio.  I was doing this mostly out of boredom (lot's of time to read analyst report, pundits, etc) and as a challenge to myself to test my risk tolerance.  So far so good.  I will definitely go back to boring index investing at some point but the wild extremes of these past few months have been a lot of fun.  Picking up 30% in gains in a week on a stock wouldn't even have been in the realm of thought six months ago for me.  Now it's totally doable.  Not advocating.  Just throwing in my 2 cents that buying and selling short term in this market has kept me sane more than being about pure greed.

This pretty much summed it up for me in a nutshell.
I wouldn't normally do this in a normal market but I'm freaking bored and I have some money to play with.

MustacheAndaHalf

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Re: Be fearful when others are greedy
« Reply #28 on: May 19, 2020, 11:52:11 PM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
That's incorrect.  Where are you getting your data?
Portfolio visualizer shows a performance difference of 1.1% per year, with a gap of just 9.7% from 2010 - 2019.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2010&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1_1=100&symbol2=VOO&allocation2_2=100
Dividends, innit.
Earlier you accused me of not "bothering to check the performance", suggesting that you did.  And then you claimed the S&P 500 beat Berkshire by 100%.  Maybe before accusing others of not checking the facts, you should look at factual information yourself?  Post a link from a reputable website showing the 100% performance gap.

From morningstar, the 15 year total return of BRK.B is 7.81%/yr versus 8.31%/yr for SPY.  That's a gap of well under 10% in total performance.
http://performance.morningstar.com/stock/performance-return.action?t=BRK.B
https://www.morningstar.com/etfs/arcx/spy/performance

Where is your data showing a 100% performance gap between Berkshire Hathaway and the S&P 500?

vand

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Re: Be fearful when others are greedy
« Reply #29 on: June 20, 2020, 12:26:52 PM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
That's incorrect.  Where are you getting your data?
Portfolio visualizer shows a performance difference of 1.1% per year, with a gap of just 9.7% from 2010 - 2019.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2010&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1_1=100&symbol2=VOO&allocation2_2=100
Dividends, innit.
Earlier you accused me of not "bothering to check the performance", suggesting that you did.  And then you claimed the S&P 500 beat Berkshire by 100%.  Maybe before accusing others of not checking the facts, you should look at factual information yourself?  Post a link from a reputable website showing the 100% performance gap.

From morningstar, the 15 year total return of BRK.B is 7.81%/yr versus 8.31%/yr for SPY.  That's a gap of well under 10% in total performance.
http://performance.morningstar.com/stock/performance-return.action?t=BRK.B
https://www.morningstar.com/etfs/arcx/spy/performance

Where is your data showing a 100% performance gap between Berkshire Hathaway and the S&P 500?

Firstly, I said 10 years. 10 is not 15. Clear? Good.

Here is SPY vs BRK over 10 years:

https://api.wsj.net/api/kaavio/charts/big.chart?nosettings=1&symb=SPY&uf=0&type=128&size=3&sid=9864&style=320&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=13&rand=1471807159&compidx=aaaaa%3a0&comp=brk.a&ma=6&maval=21,55,233&lf=4&lf2=2&lf3=33554432&height=820&width=720&mocktick=1

SPY has done 185% in the last 10 years
But SPY also has a small dividend which if reinvested would have boosted its return (currently 1.85%)
So true SPY return is more like 220%

BRK has done 120% in the last 10 years, and doesn't pay any dividend.

Brk's return of 120% is 100% short of S&P's 220%. That is where my 100% figure comes from.


AdrianC

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Re: Be fearful when others are greedy
« Reply #30 on: June 20, 2020, 07:18:07 PM »
Instead of guessing, use a site that includes dividends. Hereís one:

https://www.portfoliovisualizer.com/backtest-portfolio

Use SPY for S&P500,  BRK.b for Berkshire.

Berkshire has underperformed, but not by 100%, and itís all in the last 18months.

vand

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Re: Be fearful when others are greedy
« Reply #31 on: June 21, 2020, 03:03:53 AM »
I didn't realize portfoliovisualiser contained total returns for the ETFs.. that's very handy, cheers AdrianC. No idea why other mainstream financial sites don't have this info. You'd think that that would be kinda an important dataset.

These things are quite sensitive to exact timeframes..

If I start with Jan 2010 to last month

SPY 10k ->  33.56k, 12.33% CAGR
BRK 10k -> 28.01k, 10.42% CAGR


Using May 2010:
SPY 10k ->  31.35k, 12.0% CAGR
BRK 10k -> 24.16k, 9.14% CAGR


June 2010 (exactly 10 years):
SPY 10k ->  34.06k, 13.0% CAGR
BRK 10k -> 26.3k, 10.16% CAGR

Jul 2010:
SPY 10k ->  35.9k, 13.76% CAGR
BRK 10k -> 23.2k, 8.83% CAGR

Actually that's quite incredible how the ~10year CAGR has been varied so wildly just depending on the start date. You could have underperformed by as little as -1.9% annually if you have bought BRK in January, or as much as  -4.93% if you had bought in July.

Incidentally as this month as been so bad for BRK then the rolling 10yr number is going to look considerably worse next when this month is in the record books. Unless there is a dramatic snapback for BRK, when we get the July 2010 - Jun 2020 dataset my "100% underperformance" will not be correct.. it will actually be greater than 100% (it already is as 35.9k minus 23.2k is greater than the original 10k).


To be fairer to BRK though, "100% underperformance" is not the way to phrase it. If SPY is the benchmark then it is better to say that BRK has only delivered just over 50% of the total return of the S&P over the 10 year holding period.
« Last Edit: June 21, 2020, 03:09:44 AM by vand »

MustacheAndaHalf

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Re: Be fearful when others are greedy
« Reply #32 on: June 21, 2020, 07:31:09 AM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
That's incorrect.  Where are you getting your data?
Portfolio visualizer shows a performance difference of 1.1% per year, with a gap of just 9.7% from 2010 - 2019.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2010&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1_1=100&symbol2=VOO&allocation2_2=100
Dividends, innit.
Earlier you accused me of not "bothering to check the performance", suggesting that you did.  And then you claimed the S&P 500 beat Berkshire by 100%.  Maybe before accusing others of not checking the facts, you should look at factual information yourself?  Post a link from a reputable website showing the 100% performance gap.

From morningstar, the 15 year total return of BRK.B is 7.81%/yr versus 8.31%/yr for SPY.  That's a gap of well under 10% in total performance.
http://performance.morningstar.com/stock/performance-return.action?t=BRK.B
https://www.morningstar.com/etfs/arcx/spy/performance

Where is your data showing a 100% performance gap between Berkshire Hathaway and the S&P 500?
Firstly, I said 10 years. 10 is not 15. Clear? Good.
...
In another thread you directly insulted my math skills (before others pointed out you were the one who was calculating incorrectly), which breaks the forum rules.

Here you are taking a condescending tone towards me, also breaking the forum rules.  I've reported your behavior to the moderators, since this is a pattern of behavior from you.

vand

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Re: Be fearful when others are greedy
« Reply #33 on: June 21, 2020, 08:06:05 AM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
That's incorrect.  Where are you getting your data?
Portfolio visualizer shows a performance difference of 1.1% per year, with a gap of just 9.7% from 2010 - 2019.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2010&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1_1=100&symbol2=VOO&allocation2_2=100
Dividends, innit.
Earlier you accused me of not "bothering to check the performance", suggesting that you did.  And then you claimed the S&P 500 beat Berkshire by 100%.  Maybe before accusing others of not checking the facts, you should look at factual information yourself?  Post a link from a reputable website showing the 100% performance gap.

From morningstar, the 15 year total return of BRK.B is 7.81%/yr versus 8.31%/yr for SPY.  That's a gap of well under 10% in total performance.
http://performance.morningstar.com/stock/performance-return.action?t=BRK.B
https://www.morningstar.com/etfs/arcx/spy/performance

Where is your data showing a 100% performance gap between Berkshire Hathaway and the S&P 500?
Firstly, I said 10 years. 10 is not 15. Clear? Good.
...
In another thread you directly insulted my math skills (before others pointed out you were the one who was calculating incorrectly), which breaks the forum rules.

Here you are taking a condescending tone towards me, also breaking the forum rules.  I've reported your behavior to the moderators, since this is a pattern of behavior from you.

^_^
Yes I screwd up my maths elsewhere, but I'm happy to admit that.

I'd rather admit mistakes than cry foul when someone when someone dissects my argument with better reason and research.

If the mods want to take action over that because some snowflake's ego can't handle being corrected, then frankly I'd rather not be here.

Michael in ABQ

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Re: Be fearful when others are greedy
« Reply #34 on: June 21, 2020, 09:24:54 AM »
Every two weeks another $1,000 or so in the market. Doesn't really matter what happens next week, next month, or even next year. This is for 15+ years in the future.

MustacheAndaHalf

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Re: Be fearful when others are greedy
« Reply #35 on: June 21, 2020, 11:27:09 AM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
That's incorrect.  Where are you getting your data?
Portfolio visualizer shows a performance difference of 1.1% per year, with a gap of just 9.7% from 2010 - 2019.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2010&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1_1=100&symbol2=VOO&allocation2_2=100
Dividends, innit.
Earlier you accused me of not "bothering to check the performance", suggesting that you did.  And then you claimed the S&P 500 beat Berkshire by 100%.  Maybe before accusing others of not checking the facts, you should look at factual information yourself?  Post a link from a reputable website showing the 100% performance gap.

From morningstar, the 15 year total return of BRK.B is 7.81%/yr versus 8.31%/yr for SPY.  That's a gap of well under 10% in total performance.
http://performance.morningstar.com/stock/performance-return.action?t=BRK.B
https://www.morningstar.com/etfs/arcx/spy/performance

Where is your data showing a 100% performance gap between Berkshire Hathaway and the S&P 500?
Firstly, I said 10 years. 10 is not 15. Clear? Good.
...
In another thread you directly insulted my math skills (before others pointed out you were the one who was calculating incorrectly), which breaks the forum rules.

Here you are taking a condescending tone towards me, also breaking the forum rules.  I've reported your behavior to the moderators, since this is a pattern of behavior from you.

^_^
Yes I screwd up my maths elsewhere, but I'm happy to admit that.

I'd rather admit mistakes than cry foul when someone when someone dissects my argument with better reason and research.

If the mods want to take action over that because some snowflake's ego can't handle being corrected, then frankly I'd rather not be here.
And yet when you insult me, saying "This is high-school maths", you do not apologize for your insult.

When you get something right, we'll find out if I can handle it.  Here in this thread, you again admit you were wrong about BRK performance.  I quoted Portfolio Visualizer, and you ignored it.  Someone else quotes Portfolio Visualizer, and suddenly you realize that's the source of accurate information.  so tell me, what's the difference between me quoting Portfolio Visualizer and someone else?

You got the math wrong for compounding returns - showing when it comes to "high-school maths", you arne't as good as you think.  You're actually worse at it than I am, so you got the wrong result and didn't even know you were wrong.

In this thread, you quoted a website without enough data, and tried to make up the difference on your own - again trying to get those compounded returns (from dividends), and again getting it wrong.  Here's the numbers from Portfolio Visualizer (which I quoted earlier in this thread) spelled out for you:

2010-2019 performance:
BRK.B had an annual return (CAGR) of 13.17%, turning $10,000 into $34,464.
SPY had an annual return (CAGR) of 13.44%, turning $10,000 into $35,283.

Let me help you with the division: 35283 / 34463 = 1.02, meaning SPY beat BRK by a total of +2%.  Or in per-year terms, by 0.27% a year.  So again, you got it wrong after being condescending, and naturally you won't apologize because you have some kind of ego investment in not letting me tell you you're wrong... again and again.  What's up with that?

Buffaloski Boris

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Re: Be fearful when others are greedy
« Reply #36 on: June 21, 2020, 12:32:38 PM »

^_^
Yes I screwd up my maths elsewhere, but I'm happy to admit that.

I'd rather admit mistakes than cry foul when someone when someone dissects my argument with better reason and research.

If the mods want to take action over that because some snowflake's ego can't handle being corrected, then frankly I'd rather not be here.

Whoa. I doubt the mods are going to toss you absent a clear and persistent violation of the site rules. The fact that Iím still here is compelling evidence that theyíre pretty tolerant. Lord knows I tick off plenty of the Perpetually Offended due to my unorthodox financial perspective and apolitical views, so Iíd be surprised if a few havenít gone whinging to the mods. To their credit the mods have left me be.

I like your perspective and I hope youíll stick it out. The site would be the lesser to not to have your contributions. And there are so few real contrarians out there that we probably should make the effort to hang together lest we hang separately.

 

MustacheAndaHalf

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Re: Be fearful when others are greedy
« Reply #37 on: June 21, 2020, 10:29:43 PM »
Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.

Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
That's incorrect.  Where are you getting your data?
Portfolio visualizer shows a performance difference of 1.1% per year, with a gap of just 9.7% from 2010 - 2019.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2010&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1_1=100&symbol2=VOO&allocation2_2=100
Dividends, innit.
Earlier you accused me of not "bothering to check the performance", suggesting that you did.  And then you claimed the S&P 500 beat Berkshire by 100%.  Maybe before accusing others of not checking the facts, you should look at factual information yourself?  Post a link from a reputable website showing the 100% performance gap.

From morningstar, the 15 year total return of BRK.B is 7.81%/yr versus 8.31%/yr for SPY.  That's a gap of well under 10% in total performance.
http://performance.morningstar.com/stock/performance-return.action?t=BRK.B
https://www.morningstar.com/etfs/arcx/spy/performance

Where is your data showing a 100% performance gap between Berkshire Hathaway and the S&P 500?
Firstly, I said 10 years. 10 is not 15. Clear? Good.
...
In another thread you directly insulted my math skills (before others pointed out you were the one who was calculating incorrectly), which breaks the forum rules.

Here you are taking a condescending tone towards me, also breaking the forum rules.  I've reported your behavior to the moderators, since this is a pattern of behavior from you.

^_^
Yes I screwd up my maths elsewhere, but I'm happy to admit that.

I'd rather admit mistakes than cry foul when someone when someone dissects my argument with better reason and research.

If the mods want to take action over that because some snowflake's ego can't handle being corrected, then frankly I'd rather not be here.
So you're threatening to take your ball and go home if the forum rules aren't changed just for you... and without irony, you're calling someone else a snowflake?

I've repeatedly proven you wrong, and you always drag out the discussion instead of admitting you're wrong.  I quote Investopedia, you argue what the definition meant while claiming everything I post is nonsense.  You call Buffet a "great man", then claim he can be replaced by the S&P 500 just to disagree with me.  Here I showed you were wrong with data, and you took a condescending tone instead of admitting you were wrong.  Then other people provided data from the exact same source, and suddenly you can admit you were wrong all along.

I think you can't admit when I'm right, and since the facts aren't on your side, you resort to name calling - like you did in your post above.  And somehow you make your inability to follow the forum rules about other people?

https://forum.mrmoneymustache.com/forum-information-faqs/forum-rules/
"1. Don't be a jerk.
2. Attack an argument, not a person."

"Try to stay towards the top of Graham's Hierarchy of Disagreement ..."
(the bottom of that hierarchy:)
"responding to tone"
"ad hominem"
"name calling"

theoverlook

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Re: Be fearful when others are greedy
« Reply #38 on: June 22, 2020, 12:36:21 PM »
Which one is the "snowflake," the one that can't handle admitting being wrong or the one that expects civility in conversation? vand, you were wrong AND condescending and insulting. It's a common and unfortunate trait. Learn from this and admit your failure here.

waltworks

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Re: Be fearful when others are greedy
« Reply #39 on: June 22, 2020, 01:16:48 PM »
Yeah, frankly @vand, you should step up and apologize.

-W

vand

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Re: Be fearful when others are greedy
« Reply #40 on: June 23, 2020, 05:24:56 AM »

2010-2019 performance:
BRK.B had an annual return (CAGR) of 13.17%, turning $10,000 into $34,464.
SPY had an annual return (CAGR) of 13.44%, turning $10,000 into $35,283.

Let me help you with the division: 35283 / 34463 = 1.02, meaning SPY beat BRK by a total of +2%.  Or in per-year terms, by 0.27% a year.  So again, you got it wrong after being condescending, and naturally you won't apologize because you have some kind of ego investment in not letting me tell you you're wrong... again and again.  What's up with that?

You are using the Yearly data.

Switch to month-to-month and you will see my figures ARE correct.

June 2010-May 2020 (EXACTLY the last 120 months):



Next month wil look even worse for BRK.

No Aplogy Necessary if I'm right (and I am).
« Last Edit: June 23, 2020, 05:28:05 AM by vand »

MustacheAndaHalf

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Re: Be fearful when others are greedy
« Reply #41 on: June 23, 2020, 05:58:16 AM »
Earlier in this thread you claimed:
Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.

And now as evidence you provide a graph where the ending balances are $34,060 and $26,309 :
June 2010-May 2020 (EXACTLY the last 120 months):



Next month wil look even worse for BRK.

No Aplogy Necessary if I'm right (and I am).
I'm getting Dejavu here with your ongoing math errors: Where's the 100% under performance?

26309 / 34060 = .772 which is roughly 23% under performance.
Or to paraphrase your arrogant attitude towards me:  "23% isn't 100%?  Clear?"

In the thread about compounding interest, after insulting me by saying "This is high school maths", you screwed up the math.  And this is interesting - both times, you had no idea you made a mistake. Others had to quote where you make the math error, because you weren't able to see it.

So here we are again, you haven't shown 100% under performance, and you think you have.  You're wrong, refusing to admit it, and not seeing your own math errors.


In another argument we haven't resolved, you claimed the book "Global Asset Allocation" fairly represented the "Buffet Portfolio" as 90% S&P 500 and 10% bonds.
I highly doubt Faber is trying to mislead anyone or somehow deny Buffett his stock picking kudos. That is not my impression at all. He doesnít call it the S&P portfolio because guess what? Itís not 100% S&P,  itís 90% with 10% bonds. Call it the Buffett portfolio, the 90/10, Brian or whatever else you want.. it doesnít change the message that is being conveyed.
In that thread, I never got you to agree a "Buffet Portfolio" should be 100% Berkshire stock.  In this thread, you assume it's true without saying a word!  So are you wrong here to represent Buffet with 100% Berkshire, or were you wrong in the other thread to defend representing Buffet with 90% S&P 500 and 10% bonds?  Does anyone but you have two definitions for a Buffet portfolio?

theoverlook

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Re: Be fearful when others are greedy
« Reply #42 on: June 23, 2020, 08:01:38 AM »
No Aplogy Necessary if I'm right (and I am).
Actually, you can be right and still owe someone an apology just for your tone. However, you're still not right.

vand

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Re: Be fearful when others are greedy
« Reply #43 on: June 23, 2020, 08:27:30 AM »
Earlier in this thread you claimed:
Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.

And now as evidence you provide a graph where the ending balances are $34,060 and $26,309 :
June 2010-May 2020 (EXACTLY the last 120 months):



Next month wil look even worse for BRK.

No Aplogy Necessary if I'm right (and I am).
I'm getting Dejavu here with your ongoing math errors: Where's the 100% under performance?

26309 / 34060 = .772 which is roughly 23% under performance.
Or to paraphrase your arrogant attitude towards me:  "23% isn't 100%?  Clear?"

In the thread about compounding interest, after insulting me by saying "This is high school maths", you screwed up the math.  And this is interesting - both times, you had no idea you made a mistake. Others had to quote where you make the math error, because you weren't able to see it.

So here we are again, you haven't shown 100% under performance, and you think you have.  You're wrong, refusing to admit it, and not seeing your own math errors.


In another argument we haven't resolved, you claimed the book "Global Asset Allocation" fairly represented the "Buffet Portfolio" as 90% S&P 500 and 10% bonds.
I highly doubt Faber is trying to mislead anyone or somehow deny Buffett his stock picking kudos. That is not my impression at all. He doesnít call it the S&P portfolio because guess what? Itís not 100% S&P,  itís 90% with 10% bonds. Call it the Buffett portfolio, the 90/10, Brian or whatever else you want.. it doesnít change the message that is being conveyed.
In that thread, I never got you to agree a "Buffet Portfolio" should be 100% Berkshire stock.  In this thread, you assume it's true without saying a word!  So are you wrong here to represent Buffet with 100% Berkshire, or were you wrong in the other thread to defend representing Buffet with 90% S&P 500 and 10% bonds?  Does anyone but you have two definitions for a Buffet portfolio?

The hint is in the title of the book - it is called "Global Asset Allocation"

Let that sink in for a second. Did you think you were going to open a book that focuses on asset class mixes and efficient portfolios, flip to the chapter titled "Warren Buffett's advice" and think it was going to start talking about Coca Cola and IBM, economic moats and margin of safety?

Within the context of the book it is perfectly fine to label it under Warren Buffett, whose advise to the laymay has always been "buy good businsses to participate in the American tailwind." My view remains unchanged.

« Last Edit: June 23, 2020, 08:29:28 AM by vand »

vand

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Re: Be fearful when others are greedy
« Reply #44 on: June 23, 2020, 08:52:23 AM »
As for the BRK vs SPY underperformance.

To be fairer to BRK though, "100% underperformance" is not the way to phrase it. If SPY is the benchmark then it is better to say that BRK has only delivered just over 50% of the total return of the S&P over the 10 year holding period.

It is not a case of 26.3k (BRK) vs 34k (SPY) because you are starting from a base of $10k.

10k -> 26.3k = 16.3k profit, 163% total return
10k -> 34k = 24k profit, 240% total return

163 is 67.92% of 240. Take this to the daily level and the gap becomes more like 60%, hence my summary "BRK has only delivered just over 50% of the total return of the S&P over the 10 year holding period." is pretty close.

OurTown

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Re: Be fearful when others are greedy
« Reply #45 on: June 23, 2020, 09:25:19 AM »
This bickering is pointless.  Vader, release him!

MustacheAndaHalf

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Re: Be fearful when others are greedy
« Reply #46 on: June 25, 2020, 06:23:49 PM »
As for the BRK vs SPY underperformance.

To be fairer to BRK though, "100% underperformance" is not the way to phrase it. If SPY is the benchmark then it is better to say that BRK has only delivered just over 50% of the total return of the S&P over the 10 year holding period.

It is not a case of 26.3k (BRK) vs 34k (SPY) because you are starting from a base of $10k.

10k -> 26.3k = 16.3k profit, 163% total return
10k -> 34k = 24k profit, 240% total return

163 is 67.92% of 240. Take this to the daily level and the gap becomes more like 60%, hence my summary "BRK has only delivered just over 50% of the total return of the S&P over the 10 year holding period." is pretty close.
You just posted that to try and change the argument when you're losing.  Here's what you said:

Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.
Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
You said Buffet underperformed the S&P 500 by 100% in the last decade.  You were wrong about that, weren't you?

And just to get back to my 15 year example... if Buffet isn't underperforming by 100% over 15 years, there's two possibilities: he also didn't underperform over 10 years, or the 10 year example is cherry picking.  That's what I see you doing here: when I and others showed you that the 10 year performance was not "100% underperformance", you switched to start month and end month, again trying to cherry pick the dates.  And after all that rejecting of 15 years... or 10 years that didn't end on a certain month... you still can't show "100% underperformance" by Warren Buffet, who runs Berkshire Hathaway.

vand

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Re: Be fearful when others are greedy
« Reply #47 on: June 26, 2020, 03:26:06 AM »
As for the BRK vs SPY underperformance.

To be fairer to BRK though, "100% underperformance" is not the way to phrase it. If SPY is the benchmark then it is better to say that BRK has only delivered just over 50% of the total return of the S&P over the 10 year holding period.

It is not a case of 26.3k (BRK) vs 34k (SPY) because you are starting from a base of $10k.

10k -> 26.3k = 16.3k profit, 163% total return
10k -> 34k = 24k profit, 240% total return

163 is 67.92% of 240. Take this to the daily level and the gap becomes more like 60%, hence my summary "BRK has only delivered just over 50% of the total return of the S&P over the 10 year holding period." is pretty close.
You just posted that to try and change the argument when you're losing.  Here's what you said:

Have you even bothered to check Berkshire's performance lately?

It's trailing the S&P by -18% over the last year, and -14% YTD.. and that's without even factoring in any dividends received from the index. So, no, he's not really anywhere near market returns, not by a long chalk. I don't know anyone else who would get a free pass from their investors having underperformed so miserably.

On a forum that seems to get excited about Vanguard being able to save you 0.1% in annual fees I just thought that would have been, y'know, worth recognising.
Both of your examples are in the past 12 months.  To be clear, you're saying nobody tolerates a single year of under performance.
Fair enough. He's underperformed the S&P by 100% in the last decade. I know plenty of peole who wouldn't tolerate that.
You said Buffet underperformed the S&P 500 by 100% in the last decade.  You were wrong about that, weren't you?

And just to get back to my 15 year example... if Buffet isn't underperforming by 100% over 15 years, there's two possibilities: he also didn't underperform over 10 years, or the 10 year example is cherry picking.  That's what I see you doing here: when I and others showed you that the 10 year performance was not "100% underperformance", you switched to start month and end month, again trying to cherry pick the dates.  And after all that rejecting of 15 years... or 10 years that didn't end on a certain month... you still can't show "100% underperformance" by Warren Buffet, who runs Berkshire Hathaway.

This is getting boring now.

SPY closing price 2010-28-06: $87.92
SPY price 2020-25-06: $307.35
10yr rolling return: 249.6%

BRK/A price 2010-28-06: $121000
BRK/A price 2020-25-06: $267840
10yr rolling return:  121.4%

Prices taken from stockcharts.com which factors in dividend payments AND has daily data.
https://stockcharts.com/articles/mailbag/2014/11/what-is-the-difference-between-adjusted-and-unadjusted-data.html

As for 15 years:

SPY closing price 2005-27-06: $88.0
SPY price 2020-25-06: $307.35
15yr rolling return: 249.3%

BRK/A price 2005-27-06: $83500
BRK/A price 2020-25-06: $267840
15yr rolling return:  220.8%

BERKSHIRE STILL TRAILS OVER 15 YEARS
« Last Edit: June 26, 2020, 03:41:47 AM by vand »

habanero

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Re: Be fearful when others are greedy
« Reply #48 on: June 26, 2020, 03:47:03 AM »
Each case using a base value of 100, end date as of yesterday

period berk A/sp 500 total return (data from one of those fancypants data providers)

40y   9236/2468
30y    3712/1645 
25y    1124/914
20y     489/313
15y     321/354
10y     221/353
5y      128/163

A crucial point is what happend during the .com bust - Berkshire went up about 25% from the peak while the S&P was down 30% in the 2 years following the crash. 

So yes, Berkshire has trailed for 5, 10 and 15 years. But outperformed for longer period. By a lot if you go further back.
« Last Edit: June 26, 2020, 03:50:46 AM by habaneroNorway »

vand

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Re: Be fearful when others are greedy
« Reply #49 on: June 26, 2020, 04:05:25 AM »
Yes, Buffett did very well to avoid the tech bubble and hoover up all the value on offer which put him in a position to massively outperform during the subsequent bust.

Since then he really hasn't had anything to write home about. Again he had a few good years through the GFC where his defensive bent put gave him the base to outperform for a few up until about 2011-2012, but his reluctance to participate in big tech has really hurt in the last decade.

To be clear again, I like Buffett, and I do think he has been a Great Investor. You can't argue with his long term record, but equally its difficult to defend his mediocre record over the 10-15 years. In each historic bust and subsequent recovery the Buffett factor has been less and less pronounced. I don't think Buffett is positioned anywhere as well today to catch up from this difficult period as he was, say in 2000. My view is that he is stuck with a lot of old and underperforming companies in a world where competitive advantages are much easier to break down if the disruptor has a better business model. Even his one big foray into Tech - Apple - is arguably the least "techie" of the FAANGs and more of a hardware/device manufacturer. More and more, he seems unwilling to take on much investment risk, so it should be no surprise that he does not deliver outstanding returns.

Buffett loves his little market analogies.. one of his most famous is that value investing is like a batter who is who cannot be struck out just sitting there and waiting for the fat pitch. This is true, but the pitcher has evolved from an out of shape 50yr old to a monstrous machine firing down ballistic 100mph+ curveballs each time. As such, he should swing more often with the view that making 2nd or 3rd base is still a good result.
« Last Edit: June 26, 2020, 04:44:13 AM by vand »