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Old 02-26-2019, 07:13 AM
 
1,087 posts, read 775,278 times
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But most people do not have $114.75 to put away and invest 77 years ago. He just showed what difference it would make if you do.
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Old 02-26-2019, 10:42 AM
 
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Quote:
Originally Posted by fallstaff View Post
Without a crystal ball in effect, all he did was place bets. All the things needed for his bets to pay off happened. He looks "Smart"
Nope.

He does not place bets.

He prefers to buy companies, thereby buying their sustainable business models. That is not placing a bet.

Because prices of companies are high, he said, he hasn't bought as many businesses as he would like, and is therefore buying equities.
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Old 02-26-2019, 10:44 AM
 
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Originally Posted by 6oo9 View Post
But most people do not have $114.75 to put away and invest 77 years ago. He just showed what difference it would make if you do.
The notion that most people 77 years ago did not have $114.75 to invest is silly.
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Old 02-26-2019, 12:29 PM
 
703 posts, read 608,759 times
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Originally Posted by RationalExpectations View Post
Nope.

He does not place bets.

.
Incorrect. Unless he controls all the inputs, all the outcomes, and The Future, it's all, at basis a bet. That is the genetic material of how the world operates. All else can only be wrong. But have a nice day.
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Old 02-26-2019, 09:41 PM
 
Location: moved
13,574 posts, read 9,590,473 times
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Originally Posted by fallstaff View Post
Incorrect. Unless he controls all the inputs, all the outcomes, and The Future, it's all, at basis a bet. That is the genetic material of how the world operates. All else can only be wrong. But have a nice day.
By your definition, any act in the present, aiming for some outcome in the future, where said outcome is anything short of foreordained, is tantamount to the placing of a bet. Isn't that a bit extreme? It would imply that my going to bed tonight, is a placing of a bet on my successfully waking tomorrow morning, for otherwise I'd have spent the night-hours putting my final affairs in order, or perhaps indulging in some acute pleasure for one last time.

In a narrow definition, a bet is wild and unprincipled entry into zero-sum game, where there are (at least) two antagonists, such that for somebody to win, somebody else has to lose. This is fundamentally untrue about the stock market, for in the "long run", ALL investors who go "long" in a broad index, win. The only ones who lose, are (1) those who hold stocks "short", (2) those who enter into derivative contracts, and (3) those whose holding-period is too brief.

To reiterate, the beauty of capital markets that all serious participants eventually win. Why then ever get nervous, exasperated, downcast or depressed?

First, because the amount by which one wins, the percentage by which one wins, may not be enough. If I make more money by growing turnips than by growing carrots, I will come to hate carrot-farming, and will condemn myself for having ever gotten into the carrot-business. I will envy the turnip-growers as being smarter and more successful. So, if real-estate or bonds or commodities or whatever else come to outstrip the stock market over a long period of time, one feels dejected and envious.

And second, because the holding-period for finally winning, may be very long. For holders of European indices, who bought into the index in 2006-2007, that period hasn't yet come. 12 years of cumulative negative returns! Perhaps those investors should have... "bet" differently?
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Old 02-28-2019, 03:51 PM
 
Location: Warwick, RI
5,429 posts, read 6,192,513 times
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Quote:
Without a crystal ball in effect, all he did was place bets. All the things needed for his bets to pay off happened. He looks "Smart"

Quote:
Incorrect. Unless he controls all the inputs, all the outcomes, and The Future, it's all, at basis a bet.

Fallstaff, nobody has a crystal ball, and nobody controls all the inputs and outcomes of everything. The difference between blind lucky bets and patient, long term value investing is explained here:


https://www8.gsb.columbia.edu/sites/...uffett1984.pdf

Last edited by treasurekidd; 02-28-2019 at 04:14 PM..
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Old 02-28-2019, 04:30 PM
 
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The difference between blind lucky bets and patient, long term value investing is explained here:
Yes, you can define anything any way you have to to get the results you want. We're all 10 ft tall if 10 ft tall is defined as "anything over 3 ft tall"

And nobody, certainly not me, has been talking about "blind lucky bets" That is a conjured term by someone to address something that was not being talked about. I guess because that's what they wanted to talk about instead. Now, that's an OK discussion to have. But it's not what I was talking about. It's a different subject.
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Old 02-28-2019, 04:31 PM
 
105,764 posts, read 107,756,464 times
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if that was the case then ibm and heinz should never have done to buffet what they did .....
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