Compounding Knowledge

Post by james_s_tayler » Wed, Feb 06, 2019, 8:20 PM UTC

tryptophan wrote: post #89

jboneal wrote: post #74

Earlier quoted context omitted.

Controversial take: Buffett is actually not a great investor in the way people think. Via the float in his insurance companies, he receives a 0% infinite maturity loan to plow into the market. That financial leverage gives him the ability to beat the market year after year - not his own stockpicking prowess. If you were to start with $1B, then get an extra $2B that you never had to pay back, you too would do quite we…

Ill take it even farther: Buffet isn't statistically different than average. He just found a strategy that happened to work, was stubborn enough to stick to it through bad times, and used copious amounts of leverage to juice returns. A really interesting paper called "Buffet's Alpha" talks about this, and was able to replicate his performance by following a few simple rules. They found that he produced very little ac…

Post by Jeff_Brown » Wed, Feb 06, 2019, 8:26 PM UTC

petra wrote: post #85

WhompingWindows wrote: post #46

Earlier quoted context omitted.

Google is inherently a shallow net, it does not trawl the depths of information. It's made for finding what's easily seen on the surface, what's most interconnected/viewed by others/what Google wants to be on the surface. If you learn to use Google scholar, for instance, you'll quickly find a skilled scholar searcher can find really great, really specific material. The question then is can you integrate and internali…

True. Both for the importance of Google Scholar, but also the question of integration . One way of course, is using your internal memory. But it's rather limited. Unless you're buffet like. But what about creating an external memory ? Maybe not as usefull as your brain, but much more usefull than Googling ? I've tried to do so with evernote. It somewhat work. But surely , it's not the person best that's possible.

Post by [deleted] » Wed, Feb 06, 2019, 8:36 PM UTC

foobiekr wrote: post #104

ohaideredevs wrote: post #96

Earlier quoted context omitted.

"He has specialized to an extreme and is taking advantage of the rewards of that specialization and natural talent in a unique way." Gates is another one of those people where most forget that his grandfather was a multi-millionaire, his mother was a director at IBM, and he had access to one of the first computers in the world. I.e. he is not an example of a self-made person, so anything he says is not really applica…

How basic is required to qualify as self-made in a meaningful sense? I’m not talking about “Should he have grounded up sand and made his own chips and boards?” stuff, I mean lots of people have similar circumstances to Gates and made nothing of themselves. As it happens the high school I went to, as a kid from a mostly lower middle class family with severe issues being able to pay attention in school in the eighties,…

Post by natalyarostova » Wed, Feb 06, 2019, 8:56 PM UTC

pcpcpc wrote: post #115

sanderjd wrote: post #81

Earlier quoted context omitted.

I think by "actually not a great investor in the way people think", what you're saying is that he isn't a particularly outstanding stock picker . To the extent that that's the way in which people think he's a great investor, it's because lots of (most?) people think investing is just stock picking. But what makes him a great investor is exactly what you outlined. He found a great strategy - insurance float for levera…

He's also a good marketer. I have a mostly unsubstantiated theory that Buffet's celebrity 1) allows him to negotiate better deals than other investors and 2) moves the market after he's invested. Re: 2) if Warren buys something, other people will pile on and drive up the price, which helps drive his returns.

Post by quietthrow » Wed, Feb 06, 2019, 9:20 PM UTC

jboneal wrote: post #74

iambateman wrote: post #30

Buffet’s approach to life is interesting for the same reason an Olympic gymnast is interesting. He has specialized to an extreme and is taking advantage of the rewards of that specialization and natural talent in a unique way. It’s easy for me to feel shame that I don’t read 8 hours per day, as Warren and Charlie do. Buffett is a phenomenal investor but by all accounts, rather odd. He eats like crap, doesn’t exercise…

Controversial take: Buffett is actually not a great investor in the way people think. Via the float in his insurance companies, he receives a 0% infinite maturity loan to plow into the market. That financial leverage gives him the ability to beat the market year after year - not his own stockpicking prowess. If you were to start with $1B, then get an extra $2B that you never had to pay back, you too would do quite we…