301–310 of 323 posts
So obviously the Hedgefund didn't beat the market enough to have a better return for the investors.... But is there anyway to compare the (Returns + Extracted Money Through Fees) vs S&P500 to see the potential return of the Hedgefund before the fees were extracted?
For context the losers argument is that Buffet picked a good team in a good period and he would have a good chance in a second cycle. https://www.bloomberg.com/view/articles/2017-05-03/why-i-los... .
Yes, it's totally possible that Buffet just got lucky. But of the five stocks, over the 9 year period (45 data points), there are only 9 data points where a fund beat the S&P for the year. They all beat the S&P the first year, then for the next 8 years there were only four instances of a fund beating the S&P, and the S&P won for the other 36 data points.
If we were to assume that the funds vs the S&P was an equal playing field (each side had a 50% chance of winning), then there's just a 20% chance that Buffet just got lucky. But the point of actually paying a fund for advice isn't to just have equal odds, the funds are supposed to beat amateurs, and by a significant margin.
What we consider "significant" is obviously open to interpretation. But the most significant win a fund had over the S&P was in 2015 where fund C beat the S&P 5.4% to 1.4%, almost a 4x higher return. But the S&P had larger than 4x returns than the funds 12 times. I'm not exactly sure how to work all of that into a probability, but it's looking like the odds that Buffet just got lucky is pretty close to zero.
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Where did you feel most comfortable with motorcycling? I've been looking to leave CA because driving here is getting worse every year.
Most comfortable? Canada. Seems like they take driving a little more seriously there. In the U. S., California is fine. Lane splitting is legal, drivers mostly competent and attentive, cops are about the right mix between lenient and slapping a ticket on you when deserve it. Even in places like L. A. I felt comfortable, even lane splitting with bags on. CA has its problems, but I like riding there. That obviously doe…
I definitely concur that California in general is pretty great for motorcycles. With 2 jackets you can ride year round. People are well conditioned to lane splitting so they make room for even the largest of bikes. Where most people I know went down was turns in and out of strip mall parking lots. All very avoidable from the drivers side.
I ended up selling my bike a few months ago. The same commute I've done for years is just ever increasing. I've been considering going public transport for a while to regain my sanity.
Eye catching headline, but the set of hedgefunds is diverse with a large range of performance. I imagine the upper tails do pretty well
Can you guarantee me access to upper tail funds? I'm interested. I'd love to get my money into Medallion.
And I'm just going to self-promote a bit and say that the bet was registered via a project I worked on, the Long Now Foundation's project Long Bets: http://longbets.org/ We've been going since 2002: https://www.wired.com/2002/05/longbets/ We are happy to host bets of long-term significance, and the minimum bet is only $200/side. I am glad to personally help shepherd people who are serious about bets to make sure you…
Long Bets is a good site to make a public statement but PredictionBook[1] or Metaculus[2] may be better to track predictions about things we argue about. Both sites calculate your Brier score, which is how you can know how well calibrated you are.[3] Since prediction tracking and aggregation sites use reputation instead of money, they scale to a higher number of predictions. As proof, there have been only 747 predict…
The Long Now's mission is to foster long-term thinking broadly. We don't care as much how well-calibrated a particular individual is. The point of Long Bets is to generate discussion, argumentation, and consideration. That's part of why we require each bettor to make a case for their side: we're less interested in who was right or wrong than how and why someone was right or wrong.
I hope that people also use those sites. But I would love to generate some clear, dramatic bets about controversial topics here. The Buffett bet is a great example. People every day are putting money into one investment or another and have been for a long time, and there's no lack of data on results. But because of this bet a great number of people have thought about these specifics, as well as the many interesting related issues. I'd love to see that around more topics.
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I can only but point you back to read the article. You may have misunderstood some facts: - He made a bet with the manager of Hedge funds that picked 5 funds of funds. None of the picked fund of funds performed better than S&P. So it is 5 against 1. We can say that this manager picked the wrong one, but none other took the risk of the bet... - Look at the first chart just at the top of the article. Hedge funds perfor…
> You mention that plenty of individual funds did beat the S&P. This is straight an apocryphal anecdotal fallacy. No, no it isn't. Individual funds have beaten the market for 20 - 30 years at a time. You won't even hear about most of them unless you really go digging, for a combination of reasons: 1. Funds that actually, consistently beat the market quickly find themselves in possession of more money than they know w…
You are saying there is a underground, invisible branch of investment that make a lot of money. But they can only condensate this money in small volumes to go under the radar. And that if people knew about it, it would loose its magic. It smells like a scenario from a movie your story!
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Buffett clearly disproves this theory. The reason is it's ignoring the overwhelming impact of bias and mal-incentives. Hundreds of thousands of investors have professional training in valuation techniques Buffett uses. But 99% don't make the same use of that skill as Buffett does, for reasons that include 1) they can't buy in to using valuation as their sole investment criteria. They want to be "smarter", thinking th…
Or perhaps Buffet has an information asymmetry. Don't you think when he is interested in buying a company that may not even be in the public market that the meetings, tours of facilities and financial due diligence represents a significant information asymmetry. This information is probably available to any who seek it but not practically to most.
Its not an informational asymmetry, it's what you do with it. Walter Schloss is another great example. Beat the market by 5% a year for over 40 years, did it buying exclusively the doggiest public companies. He was the ultimate cigar butt hunter. His advantage wasn't information Wall Street didn't have, it was his willingness to use information Wall Street wouldn't, to invest in opportunities they would not.
Buffett does have one informational edge, his experience and judgement. He knows how value works, he has total confidence it works, and he never panics, even when down 50% in 2008. He never leverages himself in a dangerous manner, never gives someone else control over his decisions.
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Investments can have a dual mandate - high returns BUT also low volatility. Many hedge funds will admit their returns may not beat the S&P500, but will counter that their returns have lower volatility -- achieving more consistent gains over time. To answer your question, sounds like the answer is still no, but it is worth noting that this whole conversation is ignoring the volatility side of the conversation.
You are correct except that doing this over 10 years somewhat removes the 'ignoring the volatility' argument.
Hedge funds would argue that they perform better in downcycles, possibly even with negative correlation to the market.
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I'd like to see where that's written into a statute book; doesn't sound correct.
It's in the book you have to study when you get your license here in Texas :) you can exceed the limit by 5mph. Have a nice day!
The reason that I said I'd like to see where it's written into statute is that I can't think of a reason why it would be legal. It sounds like driver folklore rather than law.
Having a speed limit that can be exceeded simply for overtaking (rather than by emergency services) means the practical speed limit then becomes "the limit + 5" in traffic, which increases the chance for collisions (for no reason I can think of).
I'm of course open to being shown otherwise! I couldn't find anything searching for "Texas passing speed limit" or variations, but my license is European, so I'm not sure where to look.