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Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

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Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#301

Post by avn2109 »

stouset wrote: post #271
dsacco wrote: post #256

Earlier quoted context omitted.

Sure, I'll take that bet absolutely. It's a little reductive to use "past performance is not an indication of future gains" as an argument. If you extrapolate that with the premises that I am using (namely, that it is possible to intentionally and consistently beat the market), there is no reason to have faith in the continued investment in anything, private or public, because you cannot use any past measure of succe…

Choose a measurable fund or a weighted set of them such that one can do an easy comparison of returns, net of fees and expenses, against VTSMX and I'll create the bet on longbets.

If he gets to include RenTec in his bet then it's as close to a dead certainty as you can get that he'll win. I'd like to get in on that bet too.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#302

Post by inimino »

stouset wrote: post #275
mememachine wrote: post #239

Earlier quoted context omitted.

>Secondly, every trade has a counterparty. So somebody necessarily has to be at the loser's end of every trade. This is not true. There will always be someone who wins less between the two, but it doesnt mean it wasnt a win-win trade. Some things are more valuable to one person than another.

He's talking about the stock market as an investment, not trade in general.

Some people may still value the experience of losing more than the money.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#303

Post by CurtMonash »

I was a #1-ranked stock analyst. And I indeed outperformed the market on my and my parents' accounts. I also know a small hedge fund manager who I believe could consistently outperform the market. But in each case the strategy was to know a small portfolio of underfollowed stocks very very well. It's not something that could scale. He eventually just dumped his clients and managed his own money. I stopped investing in anything except index funds after I stopped being a stock analyst.

I.e., I agree with Buffett's general premise, and have since the 1980s.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#304

Post by twosheep »

tormeh wrote: post #122
ryanmarsh wrote: post #16

"This team efficiently deals with a multitude of SEC and other regulatory requirements, files a 30,450-page Federal income tax return" 30,450 pages holy crap

How can that be necessary? Not a rhetorical question.

I guess they itemize

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#305

Post by angry-hacker »

lberk wrote: post #153
angry-hacker wrote: post #48

Earlier quoted context omitted.

To be honest, so is every successful country. That is why they are successful, because they once had or still have power over others. I'm not an American, but if you feel quilty because of the past, I'm more than welcome to get a little financial contribution to my life. I'm from small and poor country, no great history or privilege.

> To be honest, so is every successful country. That is why they are successful, because they once had or still have power over others. I'm curious, do you include Hong Kong in that classification? How about Estonia? I'm curious what 'power' you consider those countries have, or exert, over others.

Hong Kong is tricky one, but I wouldn't classify Estonia as such. While Estonia is successful considering its past, they are nowhere on the level of other developed Western countries. (yet)

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#306

Post by ralfd »

euyyn wrote: post #267
austenallred wrote: post #235

Earlier quoted context omitted.

The question at hand is "Does the American system create massive amounts of wealth?" The comment essentially claimed it only did so because of slavery. I argue that isn't true. If the American system only works as a result of slavery then it should be discounted. If not, however, it should be understood and replicated where possible. And we should all study history regardless.

No, the comment didn't claim that. Rather that it didn't start from scratch in a barren land, instead it started by abusing those people for advantage.

But ex-slavery states in the US are not the wealthiest and economically often in the bottom half. If abusing people gave an advantage the effect should be the strongest there?

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#307

Post by ralfd »

riffic wrote: post #221
oli5679 wrote: post #101

Earlier quoted context omitted.

Your first point is interesting. People gloss over how disruptive the industrial Revolution was, and the downward pressure it put on the wages of farm workers. I'm not convinced by your second one. Why didn't states like Portugal industrialise equally quickly? Or within America, why didn't states with more slaves grow faster? Germany has no history of slavery, and the same is true for modern industrialisation transit…

Germany has no history of slavery We'll just conveniently ignore the war years, gotcha.

That is stupid sophistry. In looking at an economy, comparing economic models, forced labor during 4-5 war years (especially a war which turned out to be a big loss and destruction of the country) is different than institutionalized serfdom/slavery over generations.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#308

Post by gizmo »

tptacek wrote: post #264
gizmo wrote: post #259

Earlier quoted context omitted.

I literally made this point earlier. I even used the word literally to indicate I meant it literally. > Nobody is arguing that you shouldn't start a prop trading firm. I disagree. People are absolutely arguing that nobody should start a prop firm because you can't beat the market. That the prop funds that succeed are just those that have gotten lucky in the short term. That everybody should put their money in index f…

Like I said, I wasn't say you were wrong , I was saying that you and your interlocutors were talking past each other . It can simultaneously be true that active investors can "beat the market" and that retail and institutional investors shouldn't invest in actively-managed funds. The place I think we got hung up here is on the notion of "nobody investing in", because obviously a person who starts or joins a prop trad…

It can be true, but my point is that it probably isn't true. And I've explained why I think this. You can look at passive investing as defecting in a large game of prisoner's dilemma (tragedy of the commons). With passive investing you enjoy the benefits of an efficient market without doing any analysis yourself (or paying for somebody else to do it on your behalf). So you can advise every individual to defect (because it's in their best interest) but if too many people defect the system breaks down.

So when you say "It can be true that [...] retail and institutional investors shouldn't invest in actively-managed funds", that can mean two totally opposite things, as hopefully you can now see. That's why we talk past each other. I also suspect there is a real disagreement about what the impact of index funds will be in the long term.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#309

Post by nickjarboe »

wz1000 wrote: post #90
thedevil wrote: post #54

Earlier quoted context omitted.

While I think it's important to remember these atrocities, I think that for economic understanding it's important to note that these were not the major drivers of growth. Remember that atrocities like that happened in many places that did not grow into giant economies. Stealing land and enslaving people may have given a head start, but clearly something else delivered the big gains. If you look at the history and the…

> the big boost was started by the industrial revolution Exactly. Now, lets look at some of the causes of the first Industrial Revolution First, large tracts of lands in Britain, largely held in the commons, were stolen from the peasantry and given to private individuals and landlords, as part of the Enclosure movement. This forced the peasants to look for work in cities en masse, providing cheap labor for the capita…

One might consider that if Enclosure did not increase total food production productivity per person, then the peasants would have had to just keep working the land like they did before. I'm not saying the peasants had better lives as industrial workers than as feudal farmer workers (they probably did not), but maybe in the long run more people will have better lives. Same problem today with automation.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#310

Post by chickenfries »

ralfd wrote: post #306
euyyn wrote: post #267

Earlier quoted context omitted.

No, the comment didn't claim that. Rather that it didn't start from scratch in a barren land, instead it started by abusing those people for advantage.

But ex-slavery states in the US are not the wealthiest and economically often in the bottom half. If abusing people gave an advantage the effect should be the strongest there?

> they all represent a net gain for Americans from the barren lands, primitive structures and meager output of 1776. Starting from scratch, America has amassed wealth totaling $90 trillion.

This is the original quote. The issue is with "starting from scratch." You're not starting from scratch if you obtained the land through genocide, assisted by free labor. You are starting with quite a lot. America did not start in 1776. European powers had been investing in the new world for hundreds of years at that point. The whole issue is calling the economy of America at 1776 "starting from scratch." It's ahistorical.

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