RhubarbXIV

16.2%, but good guess.

1. Ancient Art: Quincy Lee (15.0%) 2. Mittleman: Chris Mittleman (19.1%) 3. Giverny: Francois Rochon (17.5%) 4. Arlington: Mecham (17.6%) Results 2010-2015ye

I don't agree that the numbers are bad across the board. I mean, I'm a grown-ass man, I don't need to dump cheerios on my head whenever I see an expert strike out against a simple algorithm a few times in a row. Most of the funds I listed above still made 6-11% net annualized, which seems to me about in line with what I'd expect from a good fund charging 1-3% annual fees. If they'd all been down like 5% annualized, it'd be a different story, but nobody was. I really don't blame any of them for not keeping up with the S&P when it's on an unsustainable tear of 13% ann. If you want better than 6-11% you've probably got to do it yourself and really put your back into it. I have no idea who on that list will outperform for the 2016-2020 interval, which is really what's important. I suspect some are more likely than others, but I'll keep my opinions to myself for now. Usually when I like an investor that just means they agree with me- probably my worst habit. Maybe in some ways the whole "let the market be your servant not your master" thing might apply here, too. Some good funds are open to new investors for the first time in a long time, there's pressure on fees, etc. Seeing fund flows chase market ETFs at something like 8:1 relative to active managers, maybe the herd thins a bit. Maybe the ETF liquidity paradox breaks. Just try not to be so preoccupied with what everyone else is doing, e.g. the market. Yeah, the S&P500 got laid a lot in high school, but I figure the only way to succeed at investing is to just "do you," whatever that may mean.

Good luck getting Buffett to retire. ::) Yeah, I guess 2015 book value might get him there... :'( Edit: BTW, I found a loophole for Buffett. He's now running a company and not an investment vehicle. Company leaders don't have to close the shop if they underperform... wait but why? :P Hate to break it to you, but he's been in the trailing-5-year BV doghouse since 2009-2013. But also, I don't give a shit. I dig his style.

Good luck getting Buffett to retire. ::)

So for how long does XXX has to underperform to be able to shit on it without being judged as harsh? "This guy is a really great investor! He has underperformed for 20 years only! Wait a bit, he's gonna show you!" Again, wrong question. To judge skill by yearly performance alone could require more than a lifetime's worth of results, depending on your minimal required "alpha" for it to count and the level of certainty you're looking for that it exists. Trying to find a 1-2% effect in a data set where returns aren't distributed normally and have an average of ~9% plus or minus 20% (1915-2015 inflation-adjusted) you'd have to wait until damn near the heat-death of the universe to find small and statistically significant "alpha." You've got to beat the market by a lot for a long time for trailing performance figures to say much about your skill at investing. Buffett, Tepper, Greenblatt, etc. and maybe a few vampires (my hat's off to anyone who can beat the market by 1-2% over 600 years) are really the only ones we can assume to be skillful based on past performance alone. As a general guide, if you're looking at trailing results "do not shit lest ye be shat upon." If you want to find someone you CAN safely shit upon, pull up SeekingAlpha and just go wild in the comments section of the first writeup you find by an analyst who hasn't figured out how to read a 10k. Investing is about making good decisions in the future. If you want to judge other investors, do it by how well you understand and appreciate their process, not by what they've done. There are some real dufuses out there who don't do their homework and probably shouldn't be in business, but once you're past that hurdle, it's got to be about what you like. Past performance is just another method of data-mining.

That "my stupid ass" is just my personal results over the past five years in my personal account.

I think market efficiency is a straw man. Whenever I hear "the market is more efficient nowadays" I substitute in my head "the factor(s) I associate with investment acumen has recently performed poorly" and it makes a lot more sense. An analog might be chess. Consider that the goal never changes: capturing the king [earning a high return on capital]. Over the years the number of avid tournament-level players has varied significantly, but the Elo rating system makes it fairly easy to make informed comparisons between players of different eras- Alekhine v. Carlsen or Morphy v. Anand (top players of different eras) would still make for some great chess. Despite that the goal never changes, the pieces never change, the rules never change, and the skill of top players hasn't changed dramatically, chess openings DO go in and out of style over time. Until the interwar era basically nobody opened d4, but today it happens almost as often as e4. The game itself changes. "P/B beats the market" - sure, and it should, until B becomes less important to the generation of E "Low PE beats the market" - sure, and it should, until the business cycle loads you up with levered cyclicals or failing banks "High ROIC beats the market" - sure, and it should, unless the price you pay gives the market too much time to catch up while your returns converge to the ROIC "Low EV/EBITDA beats the market" "Activism beats the market" -you can see where I'm going with this. So you've got two choices: 1. do something that makes sense in the EXTREME long-term and stick to it come hell or high water for 10-30 years 2. adopt a more fluid adaptive approach and embrace the possibility that you might REALLY screw it up at some point that would take 10+ years to recover from Either way, nobody said it was easy. Some folks get good bounces early, some get 'em late, some not at all, but we're all just playing the odds. SO. For your edification I've compiled a short list of managers who have beaten the market (S&P500) substantially ITD, and yet have underperformed significantly in the past five years to 2015-12-31. References NOT available upon request. Many of the listed funds do not publicly disclose returns. The S&P 500 returned 12.6% 2011-2015, these folks all returned less. Alphabetically: Al Frank Aquamarine (Guy Spier) Ariel Auxier Baupost Berkshire (BV) Chou Cundill Daruma Fairfax Fairholme (Berkowitz) First Eagle FPA Crescent Hancock (Pzena) Horizon Kinetics (Murray Stahl) Longleaf My stupid ass Omega Pabrai Pershing Square (Ackman) Punch Card Royce Russell 2000 (whoever the hell he is) Semper Vic (Tom Russo) Sequoia Third Point (Dan Loeb) Wasatch Yacktman So did someone release an odorless, colorless, tasteless neurotoxin in Omaha at Buffetjam '09? Did these funds suddenly get too big to perform? Probably not (most are well below peak pre-crisis AUM). I also know some smaller guys who just work by themselves and do pretty great, even without satellites (although I do know a guy who speaks Swedish, so maybe that's what it takes nowadays). So is thinking over? Because too many people are doin' it? Doubtful. Maybe? If so, not for long. I've seen something like this before. But there's no guarantee this time will end with us doing donuts of joy in the AZO parking lot while the dotcom unicorns rip the copper out of their office walls for beer money. Regardless, we've gotta try, right? That's why were here after all.

I'm not convinced saturated fats are all that bad.

The party/card game Spyfall. http://www.amazon.com/gp/product/B00YTHN82W?keywords=spyfall&qid=1452548929&ref_=sr_1_2&s=toys-and-games&sr=1-2 With the leftover money I'd include Codenames, Exploding Kittens, and Funemployed.

Some of this is covered in the Fortune piece Shai linked to above.

I've been reading a lot of Cal Newport lately, and have had some good success interviewing value managers to learn about their process. I find specific process-oriented questions to be the most helpful way to lean and improve- "teach a man to fish," etc, etc. Here are my suggestions: Describe the process, begin to end of the last new investment you've made. Describe your average day. What made you think you were ready to go out on your own? What is different about your approach that yields better results? What has been the hardest period for you in terms of self-doubt/performance/the mental game? How many hours per week do you work? What do you do to relax?

My wish list would probably include the following (forgive me if any of these dudes have already been covered): Quincy Lee- Ancient Art/Teton J Carlo Cannell- Cannell Capital John Petry- Sessa Bill Beisswanger- Swift Run Capital (and Ted Weschler's sole analyst at Peninsula) Chris Mittleman- Mittleman Brothers Jamie Mai- Cornwall Capital Michael Blitzer- Kingstown Capital

Yeah, and as a bonus, the "Little Book" has trailed the market significantly since 2010 or so, so it'll teach the pre-teen patience if nothing else!

It might seem a bit patronizing, but what about Buffett's Secret Millionaire's Club? http://www.amazon.com/Secret-Millionaires-Club-Buffetts-Business/dp/1118494598/ref=sr_1_1?ie=UTF8&qid=1448896329&sr=8-1&keywords=secret+millionaires+club Or, the follow-up: How to Start Your Very First Business: http://www.amazon.com/Business-Warren-Buffetts-Secret-Millionaires/dp/1941367119/ref=pd_bxgy_14_img_3?ie=UTF8&refRID=0SNZ3BRY62QZF49409M8 I'm a 34-year-old PM and I still got something out of them. Or even Greenblatt's The Little Book that Beats The Market: http://www.amazon.com/Little-Book-Still-Beats-Market/dp/0470624159/ref=sr_1_1?s=books&ie=UTF8&qid=1448896417&sr=1-1&keywords=the+little+book+that+beats+the+market But honestly, I have no idea what this particular 12-year-old's reading habits and level are.