Is The Bottom Almost Here?

[Blugolds]

1 hour ago, stahleyp said:

 

If Buffett never lived, how would that impact the country vs these other fellows?

 

 

 

Rockefeller, Carnegie, et al did change the avg persons life..but so has Buffett, just in a different way…how many people do you know that financially benefitted from Rockefeller wealth or Carnegie steel? Did they go along for the ride with them making money? Or just benefit from jobs working for them etc. The rules were much different back then, with first mover advantage it was possible to set up an untouchable monopoly, much harder to build an empire today I think than back then, regulations, taxes, competition etc….sure a railroad improves lives, oil for vehicles, steel to build but the avg guy was used by them as labor, customers or passengers etc. 

 

The difference to me is…Buffetts view of shareholders as PARTNERS. Since the mid 1960’s till today, anybody with a couple dollars to invest could JOIN in reaping the benefits of Buffets work, those that did so early have been handsomely rewarded. If you want to know how it would impact he country, the tens of thousands decending on Omaha every year would be a start, but don’t forget the family’s of those individuals, potentially future generations, the recipients of any charity these shareholders may choose to assist, the foundations set up and run but the Buffett kids, Gates Foundation etc. 

 

Rockefeller and Carnegie were certainly philanthropists as well, and I’ve enjoyed a library or entertainment that is in some way benefitted from them, but when it comes to actually putting money in individual peoples accounts for them to do so as they please, no way those other fellas could touch Buffett, not even close. 

 

Another big name from back in the day, anybody read the book, House of Morgan?  How did the country benefit from their activities? They “just punished paper around” right? 

 

Many variables to consider on how the money was made, assistance in building business vs individual achievements, philanthropy, period in time, legacy. A railroad back in the day connecting the country helped change lives for sure, nowadays the government developed the interstate system and we take it for granted… EV replacing ICE could reduce the relevance of Standard Oil perhaps someday in the future…technology or the gov in the future will never present an opportunity for the avg joe to get 20% returns on invested money for decades and be viewed as a partner…

 

You are right, if the US had gone the way of Japan, Buffett would be some kid from Nebraska maybe…but the same could be said about the others…if the US was not what it is, there probably wouldn't have been a Rockefeller, Vanderbilt, Carnegie etc either, IMO all played to their strengths, taking opportunities available to them at their time in the best country in the world for a capitalist. If any of these guys had been born the same year that they were…but born in India, Somalia etc you wouldn’t even know their name. What’s the point? 

[Sinbius]

7 hours ago, Parsad said:

 

No, there really isn't!  He's the best. 

 

...

Ok...let's try to agree first on definition of best...

 

If you define as best as the one who actively worked to compound for the longest time investing in stocks and bonds you are probably right...but that is not a merit...many people chose to focus also on other things in life and money is not the end...just a tool to reach financial independence...

 

If you define as best as the one that has proved to achieve higher return for at least a decade (or I mean a cycle, bull and bear market included)he is not...not even close...

Edited July 2, 2022 by Sinbius

[Parsad]

6 hours ago, stahleyp said:

 

If Buffett never lived, how would that impact the country vs these other fellows?

 

 

 

 

How the country would have been impacted?  Let's try the world:

• Probably tens of thousands of people who are now financially independent because of him, his examples and teachings...me being one of them!
• There may not have been a Google as we know it.  They modelled the culture of their business on Berkshire.  They were heavily influenced by Buffett & Berkshire. 
• There probably would not be a Gates Foundation...$60B donated and $38B in assets with probably 3 times those numbers to come.  
• There probably would not be a Giving Pledge...$600B in committed assets to be given away...so far!
• Probably no Geico...no one might have heard of Jack Byrne.
• Probably Salomon brothers would have failed.
• Without Buffett...no one might know Charlie Munger or Li Lu.
• Arguably restored credibility to AXP during the salad oil scandal.
• Saved the Washington Post.
• Saved GenRe by acquiring it and ending the thousands of derivatives contracts it had...would have been exactly like AIG if he didn't acquire it...the U.S. would not have looked the way it does if it had experienced the implosions of Bear Stearns and Lehman, plus AIG and a possible GenRe.
• Was lender of last resort to GE, GS, USG and HOG during GFC...all four probably would have gone under.
• Without Buffett...Bank of America may have failed and caused a run on U.S. banks.
• Without Buffett...no Lou Simpson, no Ted and Todd, no Wally Weitz, no Markels, no White Mountain, no Mohnish Pabrai, probably not the same Ajit Jain, no Michael Burry, no Prem Watsa, no Francis Chou...you see where I'm going with this...no Sanjeev Parsad, no COBF! 

There's probably a shitload I'm missing, but hey with no me and COBF, isn't that enough!    Cheers!

[Parsad]

1 hour ago, Sinbius said:

Ok...let's try to agree first on definition of best...

 

If you define as best as the one who actively worked to compound for the longest time investing in stocks and bonds you are probably right...but that is not a merit...many people chose to focus also on other things in life and money is not the end...just a tool to reach financial independence...

 

If you define as best as the one that has proved to achieve higher return for at least a decade (or I mean a cycle, bull and bear market included)he is not...not even close...

 

Any moron could get ten coin flips correct?  Show me people who have gotten the coin flip correct 35 times, let alone nearly 70 times!  Geez, I've gotten it right 15 out of 20 years in my personal portfolio, and I should be considered mentally handicapped compared to Buffett.

 

Even show me the people who got ten years of better results than Buffett without using leverage...with no down years...and at least 30% compounded annually.  I've looked at this deeply over the years, and the only one that comes anywhere near Buffett is James Simons of Renaissance Technologies and his Medallion Fund...but he used huge amounts of leverage. 

 

Here's a good article where the author talks about the greats and then lays out Buffett's case:

 

https://awealthofcommonsense.com/2019/08/who-has-the-most-impressive-investment-track-record/

 

The consistency, the transparency, the results and the sheer amount of capital...no one even close.  No quants, no one other than him, not even a calculator!  And the use of float rather than other forms of leverage...sheer genius!  Cheers!

[Sinbius]

36 minutes ago, Parsad said:

 

Any moron could get ten coin flips correct?  Show me people who have gotten the coin flip correct 35 times, let alone nearly 70 times!  Geez, I've gotten it right 15 out of 20 years in my personal portfolio, and I should be considered mentally handicapped compared to Buffett.

 

Even show me the people who got ten years of better results than Buffett without using leverage...with no down years...and at least 30% compounded annually.  I've looked at this deeply over the years, and the only one that comes anywhere near Buffett is James Simons of Renaissance Technologies and his Medallion Fund...but he used huge amounts of leverage. 

 

Here's a good article where the author talks about the greats and then lays out Buffett's case:

 

https://awealthofcommonsense.com/2019/08/who-has-the-most-impressive-investment-track-record/

 

The consistency, the transparency, the results and the sheer amount of capital...no one even close.  No quants, no one other than him, not even a calculator!  And the use of float rather than other forms of leverage...sheer genius!  Cheers!

I give one example but there are others:

 

Peter Lynch  had a 2800% return during his tenure at Magellan (29% cagr), compare this with Buffets 2200% return at Berkshire during the same period, 1977 to 1980. Of course the outperformance of Peter Lynch vs Buffett is even more impressive because Buffett used leverage (insurance float) and was concentrated...Peter Lynch had to invest in thousands of stocks...

 

 

Edited July 2, 2022 by Sinbius

[Guest]

2 hours ago, Parsad said:

 

How the country would have been impacted?  Let's try the world:

• Probably tens of thousands of people who are now financially independent because of him, his examples and teachings...me being one of them! But you're right people were impacted. 

So tens of thousands of people pushing paper around is better than them actually being productive? Don't get me wrong, I've benefited too but that doesn't mean society is better for it. It does mean more people can loaf around though. 

• There may not have been a Google as we know it.  They modelled the culture of their business on Berkshire.  They were heavily influenced by Buffett & Berkshire. 

I agree that Google in the current form would have been different. 

• There probably would not be a Gates Foundation...$60B donated and $38B in assets with probably 3 times those numbers to come.  

Gates Foundation had already started before Buffett gave his money. In my opinion, the biggest reason the Gates Foundation was started was to do with Melinda - not Buffett.

• There probably would not be a Giving Pledge...$600B in committed assets to be given away...so far!

Yes, 100% agree here. 

• Probably no Geico...no one might have heard of Jack Byrne.

Geico exited before Buffett. Probably 99% of the population has no idea who Byrne is. Just us nerds. 

2 hours ago, Parsad said:

• Probably Salomon brothers would have failed.

That would have been good.

• Without Buffett...no one might know Charlie Munger or Li Lu.

And?

• Arguably restored credibility to AXP during the salad oil scandal.

I think the US would have been better off without credit cards. For most, they are almost like cigarettes.

• Saved the Washington Post.

haha...thanks Warren.

• Saved GenRe by acquiring it and ending the thousands of derivatives contracts it had...would have been exactly like AIG if he didn't acquire it...the U.S. would not have looked the way it does if it had experienced the implosions of Bear Stearns and Lehman, plus AIG and a possible GenRe.

The US not looking like it does right now may not be the worst thing.

• Was lender of last resort to GE, GS, USG and HOG during GFC...all four probably would have gone under.

Uhhh, thanks?

• Without Buffett...Bank of America may have failed and caused a run on U.S. banks.

Oh no, more accountability? Thanks again. 

• Without Buffett...no Lou Simpson, no Ted and Todd, no Wally Weitz, no Markels, no White Mountain, no Mohnish Pabrai, probably not the same Ajit Jain, no Michael Burry, no Prem Watsa, no Francis Chou...you see where I'm going with this...no Sanjeev Parsad, no COBF! 

I'm sure Pabrai's and Weitz's investors are super thankful for Buffett then.

And Burry would have been a practicing doctor, oh no!

 

2 hours ago, Parsad said:

There's probably a shitload I'm missing, but hey with no me and COBF, isn't that enough!    Cheers!

 

okay, okay you win.

 

 

[Guest]

2 hours ago, Sinbius said:

I give one example but there are others:

 

Peter Lynch  had a 2800% return during his tenure at Magellan (29% cagr), compare this with Buffets 2200% return at Berkshire during the same period, 1977 to 1980. Of course the outperformance of Peter Lynch vs Buffett is even more impressive because Buffett used leverage (insurance float) and was concentrated...Peter Lynch had to invest in thousands of stocks...

 

 

 

Investment wise, Lynch has nothing on Buffett. Lynch had few very good years. His last few were mediocre. If he hadn't retired, he wouldn't have the reputation he has. Before Regulation FD, Fidelity could get special insights that the average investor couldn't. Granted Regulation FD didn't come out until 2000 and Lynch retired in 1990. But Lynch's last few years doesn't exactly breed confidence for his legend either.

[Guest]

7 hours ago, Blugolds11 said:

 

 

You are right, if the US had gone the way of Japan, Buffett would be some kid from Nebraska maybe…but the same could be said about the others…if the US was not what it is, there probably wouldn't have been a Rockefeller, Vanderbilt, Carnegie etc either, IMO all played to their strengths, taking opportunities available to them at their time in the best country in the world for a capitalist. If any of these guys had been born the same year that they were…but born in India, Somalia etc you wouldn’t even know their name. What’s the point? 

 

The economy can grow and the stock market can still suck.

[Spekulatius]

4 hours ago, Parsad said:

 

How the country would have been impacted?  Let's try the world:

• Probably tens of thousands of people who are now financially independent because of him, his examples and teachings...me being one of them!
• There may not have been a Google as we know it.  They modelled the culture of their business on Berkshire.  They were heavily influenced by Buffett & Berkshire. 
• There probably would not be a Gates Foundation...$60B donated and $38B in assets with probably 3 times those numbers to come.  
• There probably would not be a Giving Pledge...$600B in committed assets to be given away...so far!
• Probably no Geico...no one might have heard of Jack Byrne.
• Probably Salomon brothers would have failed.
• Without Buffett...no one might know Charlie Munger or Li Lu.
• Arguably restored credibility to AXP during the salad oil scandal.
• Saved the Washington Post.
• Saved GenRe by acquiring it and ending the thousands of derivatives contracts it had...would have been exactly like AIG if he didn't acquire it...the U.S. would not have looked the way it does if it had experienced the implosions of Bear Stearns and Lehman, plus AIG and a possible GenRe.
• Was lender of last resort to GE, GS, USG and HOG during GFC...all four probably would have gone under.
• Without Buffett...Bank of America may have failed and caused a run on U.S. banks.
• Without Buffett...no Lou Simpson, no Ted and Todd, no Wally Weitz, no Markels, no White Mountain, no Mohnish Pabrai, probably not the same Ajit Jain, no Michael Burry, no Prem Watsa, no Francis Chou...you see where I'm going with this...no Sanjeev Parsad, no COBF! 

There's probably a shitload I'm missing, but hey with no me and COBF, isn't that enough!    Cheers!

Thanks, that’s a nice list. By definition, if you create a lot of wealth, you change the world.

 

I think you forgot the money that went and will go to the Gates foundation and will do a whole lot of good there.

Edited July 2, 2022 by Spekulatius

[Sinbius]

1 hour ago, stahleyp said:

 

Investment wise, Lynch has nothing on Buffett. Lynch had few very good years. His last few were mediocre. If he hadn't retired, he wouldn't have the reputation he has. Before Regulation FD, Fidelity could get special insights that the average investor couldn't. Granted Regulation FD didn't come out until 2000 and Lynch retired in 1990. But Lynch's last few years doesn't exactly breed confidence for his legend either.

1:The 29% cagr return is on all the 13 years...in the same period when Buffett got less returns...what's the point that his last few years were mediocre?

2:About Regulation FD...Buffett too got that advantage and got to exploit it better because he wasn't so diversified as Lynch.... another handicap that Lynch had vs Buffett but he got better returns anyways...

 

 

Edited July 2, 2022 by Sinbius

[modiva]

5 hours ago, Parsad said:

 

How the country would have been impacted?  Let's try the world:

• Probably tens of thousands of people who are now financially independent because of him, his examples and teachings...me being one of them!
• There may not have been a Google as we know it.  They modelled the culture of their business on Berkshire.  They were heavily influenced by Buffett & Berkshire. 
• There probably would not be a Gates Foundation...$60B donated and $38B in assets with probably 3 times those numbers to come.  
• There probably would not be a Giving Pledge...$600B in committed assets to be given away...so far!
• Probably no Geico...no one might have heard of Jack Byrne.
• Probably Salomon brothers would have failed.
• Without Buffett...no one might know Charlie Munger or Li Lu.
• Arguably restored credibility to AXP during the salad oil scandal.
• Saved the Washington Post.
• Saved GenRe by acquiring it and ending the thousands of derivatives contracts it had...would have been exactly like AIG if he didn't acquire it...the U.S. would not have looked the way it does if it had experienced the implosions of Bear Stearns and Lehman, plus AIG and a possible GenRe.
• Was lender of last resort to GE, GS, USG and HOG during GFC...all four probably would have gone under.
• Without Buffett...Bank of America may have failed and caused a run on U.S. banks.
• Without Buffett...no Lou Simpson, no Ted and Todd, no Wally Weitz, no Markels, no White Mountain, no Mohnish Pabrai, probably not the same Ajit Jain, no Michael Burry, no Prem Watsa, no Francis Chou...you see where I'm going with this...no Sanjeev Parsad, no COBF! 

There's probably a shitload I'm missing, but hey with no me and COBF, isn't that enough!    Cheers!

 

Buffett is greatest simply because of his soft power. 

He helped create (or cause) many greats by his actions, teachings and influence. 

Those greats helped (or cause) many others by their actions, teachings and influence. 

All this happened in one lifetime. Perhaps that will continue for generations. 

[Guest]

1 hour ago, Sinbius said:

1:The 29% cagr return is on all the 13 years...in the same period when Buffett got less returns...what's the point that his last few years were mediocre?

2:About Regulation FD...Buffett too got that advantage and got to exploit it better because he wasn't so diversified as Lynch.... another handicap that Lynch had vs Buffett but he got better returns anyways...

 

 

 

At the time, Fidelity was the biggest money manager in the world. Magellan alone had $14 billion when Lynch stepped down.  Buffett had a networth of about $3.3 billion in 1990. You don't think $14 billion (plus all of Fidelity's other resources) gives a huge advantage over Buffett in a pre Regulation FD era?

 

The point that his last few years is medicore is that it shows that luck (probably) played a large factor. 

 

Lynch had an outstanding probably 8 years. Plus, Lynch went through a huge bull market starting in 1981-1990. I would guess that Lynch would have had his head handed to him in 2000 or 2008.

 

Perhaps Cathy Wood is even better than Buffett and Lynch too? She had an even better run for 6 or 7 years. What if she opened up shop a couple years earlier and average 40% or whatever for 10 years and then retired a year or so ago?

[Sinbius]

10 minutes ago, stahleyp said:

 

.... You don't think $14 billion (plus all of Fidelity's other resources) gives a huge advantage over Buffett in a pre Regulation FD era?

 

.....

No because he didn't have a 10 stock portfolio...he had several hundreds...

 

So when Buffett has a big portfolio he is at disadvantage because is harder to find good investments to bet in a concentrated way and when he has a small portfolio he is at disadvantage because other people exploit informational advantage better than him...not convinced^^

 

Buffett had the advantage because of leverage and a concentrated portfolio...and the returns of Lynch are not by luck because he did not have a concentrated portfolio or some macro/sector play like Cathie Wood...

Edited July 2, 2022 by Sinbius

[Guest]

11 minutes ago, Sinbius said:

No because he didn't have a 10 stock portfolio...he had several hundreds...

 

So when Buffett has a big portfolio he is at disadvantage because is harder to find good investments to bet in a concentrated way and when he has a small portfolio he is at disadvantage because other people exploit informational advantage better than him...not convinced^^

 

Buffett had the advantage because of leverage and a concentrated portfolio...and the returns of Lynch are not by luck because he did not have a concentrated portfolio or some macro/sector play like Cathie Wood...

 

 

 

That might be a fair point. Any idea how big Berkshire's stock portfolio was in 1990? How big of allocation was Lynch's top 10? I mean, if you have 90% of your portfolio in the top 10 and a ton of .01% holdings, that isn't exactly diversified. But you could still easily get up to 1,400 companies (which Lynch had). 

 

Speaking of that, if it isn't luck, how could he possibly understand 1,400 companies?

 

I wouldn't say that Lynch was super lucky. I do think he was a superior manage. However, I just have no reason to believe he's a superior investor to Buffett. Lynch had an incredibly strong 8 years or so. Buffett has been going strong for a multiple of that (and in far less more difficult markets. 

[Sinbius]

11 minutes ago, stahleyp said:

 

 

 

...How big of allocation was Lynch's top 10? I mean, if you have 90% of your portfolio in the top 10 and a ton of .01% holdings, that isn't exactly diversified. ...

 

Speaking of that, if it isn't luck, how could he possibly understand 1,400 companies?

 

....

First point he did not have 90% in top ten...he was diversified...first he could not put more than 5% in a company and reading the books he talk a bit about it...when he was around 1400 stocks "just" several hundreds was the main portfolio...a lot of stocks...

 

Second point you make...he could...he explain in his books what was his framework...lots of real case studies...not like Buffett that never ever in his life gave a real example on how he invest...when people ask him how to value a company he tells things like two birds in the bush one in the hand and everybody "wow, such a great insight, you are the best teacher, you really changed my investment journey....what should I tell my kid to do with his life?"....

Edited July 2, 2022 by Sinbius

[aesophawk]

Not sure what comparing Lynch and Buffett has to do with the market bottom or even what the point of that exercise is. Who cares? They are both great investors. 

 

As far as the market bottom, I think it's too hard to tell, but I found this chart in JPM's Guide to the Markets interesting: 

[Guest]

4 hours ago, Sinbius said:

First point he did not have 90% in top ten...he was diversified...first he could not put more than 5% in a company and reading the books he talk a bit about it...when he was around 1400 stocks "just" several hundreds was the main portfolio...a lot of stocks...

 

Second point you make...he could...he explain in his books what was his framework...lots of real case studies...not like Buffett that never ever in his life gave a real example on how he invest...when people ask him how to value a company he tells things like two birds in the bush one in the hand and everybody "wow, such a great insight, you are the best teacher, you really changed my investment journey....what should I tell my kid to do with his life?"....

 

 

All fair points.

[stockman500]

Really hope we're at bottom, not liking this market at all.

[Parsad]

11 hours ago, Sinbius said:

I give one example but there are others:

 

Peter Lynch  had a 2800% return during his tenure at Magellan (29% cagr), compare this with Buffets 2200% return at Berkshire during the same period, 1977 to 1980. Of course the outperformance of Peter Lynch vs Buffett is even more impressive because Buffett used leverage (insurance float) and was concentrated...Peter Lynch had to invest in thousands of stocks...

 

 

 

You are comparing apples to oranges.  Lynch ran a fund.  Now if you compare apples to apples:

 

The original Buffett Partnership over 12 years compounded at 31.6% annualized with no down year...the S&P500 did only 9.1% annualized during the same period.  Buffett handily beat the S&P500 in each of those 12 years.

 

http://warrenbuffettoninvestment.com/buffett-partnership-performance/

 

Not to discount Lynch's performance, as it was nearly as extraordinary.  But he compounded at a lower rate and was outperformed by the S&P500 in 2 of the 13 years he ran the Magellan Fund.  Lynch was also extremely stressed out when he left the fund...Buffett is as fresh as a baby 60 years later! 

 

Cheers!

[Parsad]

5 hours ago, stahleyp said:

 

At the time, Fidelity was the biggest money manager in the world. Magellan alone had $14 billion when Lynch stepped down.  Buffett had a networth of about $3.3 billion in 1990. You don't think $14 billion (plus all of Fidelity's other resources) gives a huge advantage over Buffett in a pre Regulation FD era?

 

The point that his last few years is medicore is that it shows that luck (probably) played a large factor. 

 

Lynch had an outstanding probably 8 years. Plus, Lynch went through a huge bull market starting in 1981-1990. I would guess that Lynch would have had his head handed to him in 2000 or 2008.

 

Perhaps Cathy Wood is even better than Buffett and Lynch too? She had an even better run for 6 or 7 years. What if she opened up shop a couple years earlier and average 40% or whatever for 10 years and then retired a year or so ago?

 

Cathy Woods...This era's Abbie Joseph Cohen!  How does Woods still get inflows of capital into ARKK?  Cheers!

[Parsad]

2 hours ago, aesophawk said:

Not sure what comparing Lynch and Buffett has to do with the market bottom or even what the point of that exercise is. Who cares? They are both great investors. 

 

As far as the market bottom, I think it's too hard to tell, but I found this chart in JPM's Guide to the Markets interesting: 

 

Great chart!  I'm stealing that!  Cheers!

[crs223]

2 hours ago, stockman500 said:

Really hope we're at bottom, not liking this market at all.

I hope the market continues to go down.  I’ll be buying stocks for another 2-3 decades.

[Parsad]

1 hour ago, crs223 said:

I hope the market continues to go down.  I’ll be buying stocks for another 2-3 decades.

 

I have a feeling it is going to be a sideways market for a few years with upside and downside volatility...so buy them low, sell them high...and keep averaging in new cash.  Cheers!

[Spekulatius]

4 hours ago, Parsad said:

 

Great chart!  I'm stealing that!  Cheers!

Seems like consumer confidence and sentiment in the stock market is correlated. Who would have thought? If anything , this looks very very bullish for stocks now.

[beaufort]

I am observing the vast majority of commentators saying significant recession or potentially mild/moderate recession moving forward, or here now and lower equity prices.  Seems very one sided with everyone in agreement.  That's usually a positive for the market.  I know the worse I feel when buying, the more money I usually make with those purchases.