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Warren Buffett's Net Worth by Age

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Re: Warren Buffett's Net Worth by Age

#11

Post by svantana »

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…

It's inevitable that the market will have some inefficiencies, the question is: how can you tell whether you found one? Mark Cuban claims he got rich because he found stock price anomalies in a business he was knowledgeable about, namely network equipment [1]. But he also warns that every stock trade has a sucker involved, and how do you know that you're not the sucker (i.e. the other party knows the stock is going to go down and that's why they're selling)?

1. http://blogmaverick.com/2013/01/10/the-stock-market-2/

Re: Warren Buffett's Net Worth by Age

#12

Post by enibundo »

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…

You misspelled that asshole's name. Find another teacher.

Re: Warren Buffett's Net Worth by Age

#14

Post by scrrr »

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

Well, how many trades did he do? Is that number high enough to statistically determine if he is really more skilled than the average investor?

Re: Warren Buffett's Net Worth by Age

#16

Post by xyzzy4 »

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

If UPRO (s&p 500 leveraged 3x) had existed since the early 50s, it would've averaged about 20%-25% gains per year up until now. Warren Buffett also used leverage to invest.

Re: Warren Buffett's Net Worth by Age

#17

Post by soVeryTired »

scrrr wrote: post #14
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

Well, how many trades did he do? Is that number high enough to statistically determine if he is really more skilled than the average investor?

Even running a statistical test won't cut it. How could a statistical test account for the fact that an internet celebrity trader might be less likely to discuss his losing trades?

Re: Warren Buffett's Net Worth by Age

#18

Post by icantdrive55 »

I remember going through some of my refrence books. I was deciding which one's to toss. I opened Encyclopedia of Psychiatry (vol. 1 and 2).

The first page I flipped to said, "A man of 50 will not make anymore money than he is currently making in his life." It was just so specific, or I I got the quote wrong? I recall looking at it a few times. It was personally depressing because I was broke, and hitting 50.

To this day, I think about that sentance, supposedly extrapolated from years of statistics.

Well, even though most of the wealthy people I have pesonally interacted with had the likability factor of a boat anchor; Warren Buffet seems like one of the wealthy the others should try to emulate. He is one of the guys I secretly root for.

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