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Warren Buffett's Net Worth by Age

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Re: Warren Buffett's Net Worth by Age

#3

Post by svantana »

Wow, that's an average 26% per year increase (for the non-inflation-adjusted data) over a 70 year timespan. That's definitely not a random walk down wall street [1]. For reference, Dow Jones seems to have about 7% per year for the same time period.

[1] https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street

Re: Warren Buffett's Net Worth by Age

#4

Post by jballanc »

victorology wrote: post #2

It's interesting to read about his career to see what he did to build his wealth. https://en.wikipedia.org/wiki/Warren_Buffett#Business_career

My favorite part of his history in business is how the company whose name he eventually adopted for his whole operation (Berkshire Hathaway) was actually one of his self-admitted stupidest acquisitions, one based on vengeance rather than strategy. Seems like an unspoken bit of advice from him: name your company after your biggest fuck up, so you'll never forget you're only human.

Re: Warren Buffett's Net Worth by Age

#6

Post by sdrothrock »

freyr wrote: post #5

How do you accumulate $67k by age 14? I'm doing something wrong.

It's $67k after being adjusted for inflation.

If you click through to the original article[1] linked by the blog post, they explain that

> Warren Buffett became a player in the investment game at the wee age of 11, eventually using cash he earned from his paper route to buy some farmland in his home state. As a high school sophomore, he also reaped the rewards of a booming pinball machine business.

1. http://www.marketwatch.com/story/from-6000-to-67-billion-war...

Re: Warren Buffett's Net Worth by Age

#7

Post by yodsanklai »

svantana wrote: post #3

Wow, that's an average 26% per year increase (for the non-inflation-adjusted data) over a 70 year timespan. That's definitely not a random walk down wall street [1]. For reference, Dow Jones seems to have about 7% per year for the same time period. [1] https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street

Thanks for the link. Actually, I've been watching a finance class given by the infamous Martin Shkreli (I came across it in an other HN comment recently). https://www.youtube.com/watch?v=ARrNYyJEnFI and I've been pondering this efficiency hypothesis.

Basically, he explains how to pick stocks by fundamental analysis. Very entertaining to watch how this type of investors works. However, I can't help thinking that despite the rather sophisticated analysis, it just amounts to throwing random guesses. He always has to guesstimate some percentages (business future income over a decade and various other parameters) that can't be known precisely and little variation in them totally change the decision.

What he says it that 20% of stocks are badly priced by the market, it's just a matter of working hard enough to find them. Could it be that the market is only mostly efficient? or those successful investors are just the lucky ones and they are biased to interpret their success on great skills when it really is luck? (Nicholas Taleb's "fooled by randomness" is all about this idea).

I also watched a finance class on coursera (from Prof. Shiller) where this was discussed. A guest speaker (Andrew Redleaf) explained that the efficiency hypothesis was a thing of the past, essentially popular in academia, and he gave several reasons why it couldn't be true (you can find the video if you're interested) and it was convincing.

Re: Warren Buffett's Net Worth by Age

#9

Post by Marazan »

yodsanklai wrote: post #7
svantana wrote: post #3

Wow, that's an average 26% per year increase (for the non-inflation-adjusted data) over a 70 year timespan. That's definitely not a random walk down wall street [1]. For reference, Dow Jones seems to have about 7% per year for the same time period. [1] https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street

Thanks for the link. Actually, I've been watching a finance class given by the infamous Martin Shkreli (I came across it in an other HN comment recently). https://www.youtube.com/watch?v=ARrNYyJEnFI and I've been pondering this efficiency hypothesis. Basically, he explains how to pick stocks by fundamental analysis. Very entertaining to watch how this type of investors works. However, I can't help thinking that despi…

The market is irrational but it can stay irrational longer than you can stay solvent.
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