Sinbius Posted June 11 Posted June 11 (edited) Example...look at Guy Spier.... Guy Spier’s average annual portfolio turnover rate historically hovers around 5% to 10%, reflecting a typical holding period of 10 to 20 years for his core assets... ....Guy Spier typically meets with his fund investors in person once a year... ....image the tension the month before that day "oh $hit I have to talk to all those people, the portfolio is the same, what I am going to dress with? I am always in Tracksuit...I need to plan well...let's find some analogy to impress them and make them feel smart...what stories can I tell?...mumble mumble..."... Isn't that sitting on his a$$? Do you call it real hard work? Edited June 11 by Sinbius
73 Reds Posted June 11 Posted June 11 19 minutes ago, Sinbius said: Example...look at Guy Spier.... Guy Spier’s average annual portfolio turnover rate historically hovers around 5% to 10%, reflecting a typical holding period of 10 to 20 years for his core assets... ....Guy Spier typically meets with his fund investors in person once a year... ....image the tension the month before that day "oh $hit I have to talk to all those people, the portfolio is the same, what I am going to dress with? I am always in Tracksuit...I need to plan well...let's find some analogy to impress them and make them feel smart...what stories can I tell?...mumble mumble..."... Isn't that sitting on his a$$? Do you call it real hard work? Why should investors care about anything but results? Reminds me of the old story of the lady whose refrigerator was broken. She called a repair man who looked behind the frig, plugged it back in and charged her $100. She complained that he billed her too much for simply plugging it back in, so he looked at her and asked how much it would have cost her to replace all the spoiled food.
Sinbius Posted June 11 Posted June 11 5 minutes ago, 73 Reds said: Why should investors care about anything but results? Reminds me of the old story of the lady whose refrigerator was broken. She called a repair man who looked behind the frig, plugged it back in and charged her $100. She complained that he billed her too much for simply plugging it back in, so he looked at her and asked how much it would have cost her to replace all the spoiled food. I don't know...you tell me...why people gave him money to manage? 1. The 5-Year Horizon (Recent Underperformance) Aquamarine Fund Annualized Return: ~7.5% to 8.5% S&P 500 Annualized Return: ~12.0% to 13.5% The Context: Over his final five years of active external management, Spier lagged behind the broader market index. His portfolio entirely avoided the mega-cap "Magnificent Seven" tech sector, which heavily skewed index gains. His structural cash drags and heavy concentration in banking, automotive, and payment processors failed to keep pace with the massive growth-stock expansion. [1, 2] 2. The 10-Year Horizon (The Mid-Term Struggle) Aquamarine Fund Annualized Return: ~8.8% S&P 500 Annualized Return: ~11.5% The Context: On a 10-year rolling basis, Spier achieved strong absolute compounding, but still underperformed the S&P 500. While core multi-bagger positions like Ferrari and BYD provided major boosts, they were offset by multi-year stagnation in legacy positions and deep value traps, highlighting the systemic macroeconomic headwinds that value investing faced relative to passive indexing over the decade. []
73 Reds Posted June 11 Posted June 11 1 minute ago, Sinbius said: I don't know...you tell me...why people gave him money to manage? 1. The 5-Year Horizon (Recent Underperformance) Aquamarine Fund Annualized Return: ~7.5% to 8.5% S&P 500 Annualized Return: ~12.0% to 13.5% The Context: Over his final five years of active external management, Spier lagged behind the broader market index. His portfolio entirely avoided the mega-cap "Magnificent Seven" tech sector, which heavily skewed index gains. His structural cash drags and heavy concentration in banking, automotive, and payment processors failed to keep pace with the massive growth-stock expansion. [1, 2] 2. The 10-Year Horizon (The Mid-Term Struggle) Aquamarine Fund Annualized Return: ~8.8% S&P 500 Annualized Return: ~11.5% The Context: On a 10-year rolling basis, Spier achieved strong absolute compounding, but still underperformed the S&P 500. While core multi-bagger positions like Ferrari and BYD provided major boosts, they were offset by multi-year stagnation in legacy positions and deep value traps, highlighting the systemic macroeconomic headwinds that value investing faced relative to passive indexing over the decade. [] I've long since made the same argument as to Bruce Berkwowitz and his Fairholme Fund but somehow he still has his supporters, even some on this Board.
SharperDingaan Posted June 11 Posted June 11 (edited) No dog in this ... but Sinbius has a pretty common definition. That said, some caveats .... Not working, mortgage and debt free. No employment or pension income. Whatever is earned from investment is purely for living costs; there are no monthly mortgage, loan interest, or loan repayment obligations. Passive management. All the capital is in either a BRK/FFH, or sovereign bonds. Set and forget. Income expectation. Per 100K/yr in dividends &/or interest only, before tax and after inflation; long term cash yield of 6%, less 2% inflation = 4% capitalisation rate = 2.5 million of invested capital (100K/0.04) This implicitly assumes no growth. Beneficiaries receive today's purchasing power net of taxes, but if gran/grandpa live a decade + .... they have just ripped off the family a decade+ of compounding on a significant capital pool. This implicitly assumes the capital is not toxic. Beneficiaries use the money to pay off outstanding mortgages and debts, versus simply pissing it away on expensive toys, drugs, etc. Common amongst a great many 'rich' families. This implicitly assumes no judgement as to how that 2.5 million was obtained; could have been inheritance, worked for, or simply stolen .... all the dollars look the same. A reality that many would prefer not to hear .... This implicitly assumes a modest life style, and old age. A younger person doing a lot of travel, or an older person with poor health, may require 200K before tax and inflation, or 5 million. The toxicity issue is a very real problem; that ultimately comes down to money as the servant, not the master. Various avenues of mitigation ... from charitable giving, funding life-time opportunities/experiences, through to building enterprises that generate local employment. SD Edited June 11 by SharperDingaan
Sinbius Posted June 11 Posted June 11 (edited) quote".... A younger person doing a lot of travel, or an older person with poor health, may require 200K before tax and inflation, or 5 million. ...." ....you live in your own world...no offence... The average American takes home approximately \(\$59,430\) annually in gross personal income, or about \(\$40,000\) to \(\$46,000\) after standard taxes. By contrast, the average European gross annual wage is roughly \(\$43,000\) (€39,800), leaving an average net income closer to \(\$27,000\) to \(\$32,000\) after higher European taxes and social contributions. Edited June 11 by Sinbius
SharperDingaan Posted June 11 Posted June 11 4 minutes ago, Sinbius said: The average American takes home approximately \(\$59,430\) annually in gross personal income, or about \(\$40,000\) to \(\$46,000\) after standard taxes. By contrast, the average European gross annual wage is roughly \(\$43,000\) (€39,800), leaving an average net income closer to \(\$27,000\) to \(\$32,000\) after higher European taxes and social contributions. Assuming the requirement is the average income after tax; The average American would require $1.075M [(43/100) x 2.5M] The average European would require $0.738M [(29.5/100) x 2.5M] Comfortably in the range of what a lot of FIRE articles implicitly recommend for (American) readers; also very much in line with the conventional wisdom of 'where you live matters'. The numbers will be lower still for an India, Caribbean, South Africa, etc .... a why the maximum annual snowbird stay of six month less a day, often makes a lot of sense. SD
Charlie Posted June 11 Posted June 11 3 hours ago, 73 Reds said: Why should investors care about anything but results? Reminds me of the old story of the lady whose refrigerator was broken. She called a repair man who looked behind the frig, plugged it back in and charged her $100. She complained that he billed her too much for simply plugging it back in, so he looked at her and asked how much it would have cost her to replace all the spoiled food. I´m working as a lawyer by helping people with illnesses. The portfolio of probably most old people (that is where the money is) is one underperforming fund with high expense ratio after another. The old people don´t understand what is going on, the money manager is writing their ridiculous macro letters from time to time and send birthday cards and the incentive of the decision maker is a mostly underperforming fund with a very high fee. It´s disgusting. Is their guilt from the money manager? No. I sold an underperforming fund for an old people and the money manager recommended me another underperforming fund. He told me, if he wouldn´t do that he wouldn´t be a good money manager. The trillion dollar theft! The biggest agency cost of the world!
73 Reds Posted June 11 Posted June 11 5 minutes ago, Charlie said: I´m working as a lawyer by helping people with illnesses. The portfolio of probably most old people (that is where the money is) is one underperforming fund with high expense ratio after another. The old people don´t understand what is going on, the money manager is writing their ridiculous macro letters from time to time and send birthday cards and the incentive of the decision maker is a mostly underperforming fund with a very high fee. It´s disgusting. Is their guilt from the money manager? No. I sold an underperforming fund for an old people and the money manager recommended me another underperforming fund. He told me, if he wouldn´t do that he wouldn´t be a good money manager. The trillion dollar theft! The biggest agency cost of the world! No argument here. In my younger days as an attorney I sued brokerage firms and professional money managers for taking advantage of the elderly in and around my community (there was a near endless stream of clients back in the 80s and 90s). Yet the truth is, most financial advisors have cleaned up their act and there are simple, low cost investment alternatives and much more public, easy to understand information available to anyone who cares to look. Not to suggest that some people still don't need hand-holding when it comes to investing but most should at least recognize when their money manager is not doing a good job.
SharperDingaan Posted June 11 Posted June 11 2 hours ago, Sinbius said: quote".... A younger person doing a lot of travel, or an older person with poor health, may require 200K before tax and inflation, or 5 million. ...." ....you live in your own world ...no offence... No worries. Think a young retiree, in the go-go years, crossing items off the bucket list .... whilst they still can. 2-3 of the more exotic travels every year, an average 25K/trip, 35% tax rate. That 75K spent was 115K before tax [ 75/(1-.35)] ... living costs for the rest of the year are extra. Why so much per trip ? A once in a lifetime trip, done late in life, you're going luxury .... 3 weeks at maybe $900/day all in, plus return airfare, and insurance. That Paris to Vienna on the Orient Express, along with a few days in both Paris and Vienna before and after ..... and NOT that Contiki trip you did way back in your 20's . Sure .... it's not most people; but neither is the 5M in unencumbered capital that you have amassed, throwing off 300K (6%) of cash every year. Make your money work, and benefit accordingly. SD
Parsad Posted June 12 Posted June 12 18 hours ago, Sinbius said: Again...I define investors as people who can make their living investing only their own money...we don't do "real hard work" (of course generally you have to break yourself in two to get enough money to get there if you don't get inheritance or if you don't start very young...) ...about money manager you know, I know, everybody knows that generally they underperform while making tons of money and that's why indexing has exploded.... Athletes don't win every game, let alone the championship every year. Many have losing records. Money managers are paid to try and beat the market...they aren't paid to guarantee to beat the market, no different than any other person who is competing in a profession that results in very few winners every year. Yes, indexing is the way to go for 80% of investors. But I'm talking about people in the profession and why it exists...people pay them specifically to try and protect and grow their money at an above average rate. Most doctors are paid to treat patients...they sometimes get the diagnosis wrong like everyone else. 18 hours ago, Sinbius said: I get the impression that to "defend" your self image you have to protect the image of investors as something more noble of it really is... No, I have no problem you saying anything "factual" about money managers/investors, including whether the profession is noble or not, should exist or not, and why...I'm just saying you were making a broad generalization about people...and that isn't accurate. Now if you want to say that the end goal of every investor is to sit on their ass and make money...sure, I think that is accurate. Cheers!
Sinbius Posted June 12 Posted June 12 (edited) 18 minutes ago, Parsad said: Athletes don't win every game, let alone the championship every year.... Little details...athletes works hard every day, on average earn less....and another very little detail they all OVERPERFORM the average man....just details I guess...putting asides little details you are absolutely right... Edited June 12 by Sinbius
Parsad Posted June 12 Posted June 12 1 minute ago, Sinbius said: Little details...athletes works hard every day, on average earn less....and another very little detail they all OVERPERFORM the average man....just details I guess...putting asides little details you are absolutely right... Do researchers not work hard every day if they are working in a lab or writing a thesis/paper? Corporate lawyers spend almost all of their time sitting on their bums reading contract law...they aren't working hard? There are a ton of professions that I would imagine you would regard as sitting on their ass professions, if you define work solely as "doing the real hard work." Cheers!
nsx5200 Posted June 12 Posted June 12 On 6/8/2026 at 4:23 AM, Sinbius said: LOL...aren't you an investor? Money is just a contruct/tool to motivate you to sit on your a$$ and do nothing while other people struggle to work and pay bills... Unfortunately, this capitalistic system has a side effect of benefitting the rent-seeking landlords. It used to be literal land, but in a modern economy, equity in this type of economy is the new land. I admit it's an unwanted side-effect in the system and for those that do not already own enough of this new land to share in enough of its output, it is essentially a form of modern 'voluntary' slavery. In defense of the system, of all the systems that's tried, this is still the one that's shown to be the most productive. For those that realize how this system works can hack/escape it by practicing essentially what Buffet/Charlie have preached: spend less than you earn, and compound the savings (over long periods of time). For those that don't, the usual handcuffs to the system are done with tools of marketing, which many many people fall for. For those that can see past the handcuffs and practice what's preached, getting "rich" is more or less an inevitability. I agree that a pure investor, once getting past the point of FI(many of us here are also past the point of "early" in RE ), has a tough time justifying their value-add in this rent-seeking world. IMHO, it's a big driver for this Charlie quote: "I tried to be useful". How many of us here are actually pushing the envelope like Musk or the people he's inspired? All we can do is to try to push the our own envelope, however we can, and try to leave the world a bit better than before. In this knowledge-based society, one way is to continue to self-educate and try to leave behind some insights, not unlike what the ancient monks/nuns have done. IMHO, some "minor" value add as an active investor, as pointed out by Li Lu, is that active investors only get to keep and grow their wealth when they are right(*when done correctly, without corruption). So by nudging the price to where it should be, active investors are helping to decide where resources should optimally be directed in the economy a bit quicker. If that's still not enough, then I suspect given enough time, people will demand a new system, and we get to have another go at a new grand experiment. IMHO, capitalism is still an experiment, and we may be reaching the limits of it, at least in its current form.
boilermaker75 Posted June 12 Posted June 12 (edited) 4 hours ago, Parsad said: Athletes don't win every game, let alone the championship every year. Many have losing records. Interesting little fact, of the 80% of his matches he won, Rodger Federer only won 54% of the points in those matches. He gave a great commencement address at Dartmouth. Here is just a bit of it, Edited June 12 by boilermaker75
oscarazocar Posted June 12 Posted June 12 5 hours ago, boilermaker75 said: Interesting little fact, of the 80% of his matches he won, Rodger Federer only won 54% of the points in those matches. He gave a great commencement address at Dartmouth. Here is just a bit of it, That's a silly and almost meaningless observation. Almost all major sports are defined by slight edges multiplied by many attempts in the game, similar to blackjack. In baseball, a player who gets a hit 31% of the time is bound for the Hall of Fame and a hitter who gets a hit 28% of the time is a reasonably good player who few will remember. It may seem intuitively like Federer should have won 65% of the points of whatever, but that's just way outside the parameters of the game. All the top players in history are clustered similarly - Djokavic and Nadal also won 54% of their points. Specifically, in tennis, roughly half the time the player is serving and half the time he is returning. Federer won 70% of his serves and 38% of the points where the other guy served. That's why the number is going to end up a few ticks above 50%. An average grand slam tennis match has around 200 points. Winning 54% of the time over 200 points is total domination.
boilermaker75 Posted June 12 Posted June 12 (edited) 1 hour ago, oscarazocar said: That's a silly and almost meaningless observation. Almost all major sports are defined by slight edges multiplied by many attempts in the game, similar to blackjack. In baseball, a player who gets a hit 31% of the time is bound for the Hall of Fame and a hitter who gets a hit 28% of the time is a reasonably good player who few will remember. It may seem intuitively like Federer should have won 65% of the points of whatever, but that's just way outside the parameters of the game. All the top players in history are clustered similarly - Djokavic and Nadal also won 54% of their points. Specifically, in tennis, roughly half the time the player is serving and half the time he is returning. Federer won 70% of his serves and 38% of the points where the other guy served. That's why the number is going to end up a few ticks above 50%. An average grand slam tennis match has around 200 points. Winning 54% of the time over 200 points is total domination. You completely missed Federer's point and I am not going to take the time, nor get in an argumentative discussion, to try to explain it to you. Edited June 12 by boilermaker75
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