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Warren Buffett's bet on hedge funds vs. S&P 500
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Date: June 11th, 2018 1:24 AM Author: kink-friendly milk stock car Ten years ago Warren Buffett made a bet against a hedge fund manager, that an S&P 500 index fund would beat a group of hedge funds over a ten year period. The S&P won by a wide margin. The proceeds of the bet, something like $2.2M, went to a local charity in Omaha. There have been some news articles on the bet, but they mainly focused on the charitable aspect of it, and studiously ignored the elephant in the room, the question of what purpose hedge funds serve if they can't beat the S&P 500? https://dealbreaker.com/2018/05/hedge-funds-didnt-lose-that-bet-to-warren-buffett-because-passive-indices-will-always-beat-active-managers-over-the-long-term-but-because-they-just-picked-the-wrong-decade-to-bet-on/ |
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Date: June 11th, 2018 2:09 AM Author: brindle mind-boggling home dingle berry Indeed, ten years ago Warren Buffett made a bet against a hedge fund manager, that an S&P 500 index fund would beat a group of hedge funds over a ten year period. The S&P won by a wide margin. The proceeds of the bet, something like $2.2M, went to a local charity in Omaha. There have been some news articles on the bet, but they mainly focused on the charitable aspect of it, and studiously ignored the elephant in the room, the question of what purpose hedge funds serve if they can't beat the S&P 500?
https://dealbreaker.com/2018/05/hedge-funds-didnt-lose-that-bet-to-warren-buffett-because-passive-indices-will-always-beat-active-managers-over-the-long-term-but-because-they-just-picked-the-wrong-decade-to-bet-on/ |
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Date: June 11th, 2018 2:10 AM Author: supple unhinged hunting ground Lmao (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221826) |
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Date: June 11th, 2018 5:32 AM Author: Crystalline Crackhouse Sneaky Criminal (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221920) |
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Date: June 11th, 2018 5:34 AM Author: Hideous becky theater stage Pwn (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221923) |
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Date: June 11th, 2018 10:15 AM Author: Effete elite yarmulke (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222409) |
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Date: June 11th, 2018 10:27 AM Author: Odious dilemma lol (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222480) |
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Date: June 11th, 2018 3:22 PM Author: pearl talking partner filthpig (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224595) |
Date: June 11th, 2018 1:45 AM Author: kink-friendly milk stock car I'd be curious though, if there are any hedge funds that have consistently beat the S&P. Otherwise they look rather foolish. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221708) |
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Date: June 11th, 2018 1:58 AM Author: turquoise stage Madoff dominated the SP500 (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221780) |
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Date: June 11th, 2018 2:05 AM Author: supple unhinged hunting ground (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221796) |
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Date: June 11th, 2018 10:15 AM Author: Effete elite yarmulke (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222411) |
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Date: June 11th, 2018 2:08 AM Author: brindle mind-boggling home dingle berry Yep, I’d be curious though, if there are any hedge funds that have consistently beat the S&P. Otherwise they look rather foolish. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221813) |
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Date: June 11th, 2018 10:19 AM Author: Mint sandwich station No doubt there are, somewhere, just like there are a few mutual funds that beat the market. But you'll never identify them until afterwards so what's the point? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222436) |
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Date: June 11th, 2018 2:29 PM Author: Violent sound barrier depressive Is this a joke question? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224259) |
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Date: June 11th, 2018 2:33 PM Author: Vivacious abode Medallion has returned like 30-40% annually for three decades (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224279) |
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Date: June 11th, 2018 2:38 PM Author: Vengeful Razzle-dazzle Corner French Chef Cr and charged like 5 & 40% or something crazy like that and investors still knifed each other in the street to BEG to suck Jim Simons' wrinkled old mathcock. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224313) |
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Date: June 11th, 2018 1:58 AM Author: turquoise stage That's probably the most poorly constructed headline I've ever seen. Pretty shit article too (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221776) |
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Date: June 11th, 2018 2:00 AM Author: stimulating poppy public bath keepsake machete lol @ u, waste of space hedge fund fraud (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221783) |
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Date: June 11th, 2018 2:01 AM Author: turquoise stage what (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221786) |
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Date: June 11th, 2018 2:05 AM Author: supple unhinged hunting ground (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221798) |
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Date: June 11th, 2018 2:07 AM Author: kink-friendly milk stock car I read his authorized biography, "The Snowball," but there wasn't anything useful in it. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221808) |
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Date: June 11th, 2018 2:54 AM Author: Gold irradiated plaza incel Same (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221861) |
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Date: June 11th, 2018 2:10 AM Author: kink-friendly milk stock car How do hedge fund managers justify their jobs if they don't beat the S&P? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221824) |
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Date: June 11th, 2018 2:12 AM Author: stimulating poppy public bath keepsake machete same with stock brokers (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221829) |
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Date: June 11th, 2018 2:20 AM Author: Vivacious abode They could still have value in a portfolio by providing diversification. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221839) |
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Date: June 11th, 2018 2:20 AM Author: stimulating poppy public bath keepsake machete oh the value! LOL, really? |
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Date: June 11th, 2018 2:27 AM Author: Vivacious abode Most people don't advise holding all stocks in a portfolio. It's the same idea. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221847) |
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Date: June 11th, 2018 10:00 AM Author: cream federal base cr isn't that the definition of "hedge" fund
That's the theory at lease, in practice I'm sure they're all shysters |
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Date: June 11th, 2018 10:51 AM Author: Clear Metal School Voyeur Lol at hedge funds stealing a page from the higher-ed scam playbook. DIVERSITY IS ARE STRENGTH, don’t you dare question it.
Seriously though I’m all for being evaluated on the basis of soft, unfalsifiable claims even in the face of Flagrantly, Singularly Relevent Quantitative Metrics of Performance, so godspeed fellas. |
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Date: June 11th, 2018 10:52 AM Author: flushed hilarious masturbator round eye wut? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222617) |
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Date: June 11th, 2018 3:08 AM Author: tripping passionate senate Presumably there are circumstances they'll significantly out perform; you're not using a hedge fund to just "beat the market". If you're an investor in a long-vol fund, you might be happy just being par for a few years if eventually the market conditions (major crash) hit and you get insane returns. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221865) |
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Date: June 11th, 2018 10:03 AM Author: flushed hilarious masturbator round eye I think the point is that you'd likely get the same or better "insane returns" by just putting your money into an ETF (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222343) |
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Date: June 11th, 2018 2:36 PM Author: Marvelous rough-skinned state organic girlfriend no, that's missing the point, entirely assuming the etf consists of multiple companies, then its primary purpose is to minimize variability and minimize expenses, at least compared to the hedge fund approach |
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Date: June 11th, 2018 10:32 AM Author: jet-lagged appetizing step-uncle's house double fault ummm
so tell me how many of them outperformed the market when the crash of '08 happened |
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Date: June 11th, 2018 10:54 AM Author: Silver Big Theatre Headpube The average hedge fund lost 18 percent of its value in 2008, the industry's worst performance on record and down from an average gain of 9.96 percent in 2007, according to Hedge Fund Research. The only other negative year on record was in 2002. But even then, funds only lost an average of 1.45 percent.
Still, compared with the wider market, hedge funds don't look so bad. The Dow Jones industrial average lost 34 percent in 2008, while the Standard & Poor's 500 index fell 38 percent. |
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Date: June 11th, 2018 10:57 AM Author: fragrant harsh puppy associate (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222646) |
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Date: June 11th, 2018 11:43 AM Author: kink-friendly milk stock car So only invest in hedge funds during a bear market? Is that what you're saying? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222964) |
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Date: June 11th, 2018 2:24 PM Author: Violent sound barrier depressive I'm not sure how a hedge fund manager has trouble beating the S&P 500. It's honestly not that difficult unless you're selecting stocks from a list with your eyes closed and do zero research. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224235) |
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Date: June 11th, 2018 2:36 PM Author: Marvelous rough-skinned state organic girlfriend idiot (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224296) |
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Date: June 11th, 2018 11:49 PM Author: Indecent swollen boltzmann Guy who hasn't heard of Dunning-Krueger (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36228290) |
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Date: June 11th, 2018 2:21 AM Author: stimulating poppy public bath keepsake machete Chelsea Clinton's kike husband was so bad at Hedge Funding he got fired a couple years ago, despite his connections (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221842) |
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Date: June 11th, 2018 2:41 PM Author: Galvanic institution corn cake Good thing he's got his wife's large salaries from jobs she too is unqualified for to fall back on (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224326) |
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Date: June 11th, 2018 10:31 AM Author: jet-lagged appetizing step-uncle's house double fault the hedge fund industry is a fraud
news at 11 |
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Date: June 11th, 2018 2:13 PM Author: Laughsome Forum (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224158) |
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Date: June 11th, 2018 2:09 PM Author: kink-friendly milk stock car I suspect the media are selective in their coverage of Buffett because he's sometimes irreverent and somewhat disparaging of "the system" or "the game," as it is currently constituted. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224125) |
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Date: June 11th, 2018 2:10 PM Author: kink-friendly milk stock car People don't always appreciate candor, in other words. Have to keep up the illusion. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224142) |
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Date: June 11th, 2018 2:17 PM Author: Laughsome Forum Hedge funds are lottery tickets for rich people (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224199) |
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Date: June 11th, 2018 7:57 PM Author: Marvelous rough-skinned state organic girlfriend (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36226413) |
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Date: June 11th, 2018 2:21 PM Author: Violent sound barrier depressive Top hedge funds often net like 25%+ a year return (consistently) so if he beat a group of hedge funds using an index fund, they obviously weren't top hedge funds. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224223) |
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Date: June 11th, 2018 2:34 PM Author: Vivacious abode What funds consistently do this other than medallion (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224283) |
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Date: June 11th, 2018 2:44 PM Author: Vengeful Razzle-dazzle Corner French Chef I think Soros did for decades (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224337) |
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Date: June 11th, 2018 2:37 PM Author: Marvelous rough-skinned state organic girlfriend idiot x2 (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224308) |
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Date: June 11th, 2018 3:13 PM Author: Violent sound barrier depressive Not at all. There are a number of funds who produce those returns on a consistent basis.
Do some research. |
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Date: June 11th, 2018 3:21 PM Author: geriatric ticket booth national security agency Lol. Okay. So why didn’t the dude who made the bet just pick those? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224588) |
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Date: June 11th, 2018 3:24 PM Author: Marvelous rough-skinned state organic girlfriend oh, i'm sure he picked the equivalent of those at the time the bet was made (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224606) |
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Date: June 11th, 2018 6:55 PM Author: Smoky Aromatic Ceo *buys RenTech Medallion Fund ETF* (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36226029) |
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Date: June 11th, 2018 3:22 PM Author: Marvelous rough-skinned state organic girlfriend yeah, no they get considered 'top hedge funds' in retrospect since you are the expert, name some of these funds that consistently beat the market while you're at it, posit a reason why they are able to beat the market consistently there are only three reasons that come to mind that can explain it 1 luck 2 insider knowledge 3 riskier than the market |
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Date: June 11th, 2018 3:24 PM Author: Violent sound barrier depressive (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224612) |
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Date: June 11th, 2018 3:44 PM Author: Marvelous rough-skinned state organic girlfriend speaking of luck, within the last month or so, a hedge fund made a mega killing by betting on a 1 in a (very large number) phenomena. i thing it was based in missouri? my google skills are letting me down. a perfect example of 1 and 3 and big brass balls. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224749) |
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Date: June 11th, 2018 7:56 PM Author: Marvelous rough-skinned state organic girlfriend found it "Not everyone got crushed when the market collapsed.
For traders at a little-known Denver hedge fund who saw it coming, it was the score of a lifetime -- a $17.5 million payday on a $200,000 bet.
“People were laughing at us, saying this could never happen, this should never happen,” Justin Borus, the 41-year-old founder and manager at Denver-based Ibex Investors, said in an interview. “We saw people pricing this as a 1-in-5,000 event, but it was more like a one-in-five-year event.”
Borus’s team bet that an exchange-traded fund linked to a calm stock market would go to zero in the event of suddenly volatile trading. The ETF almost did -- it lost 96 percent of its value."
Justin BorusSource: Ibex Investors Borus said they always believed in the wager, even when just about no one else did. But the jackpot still caught them by surprise. Two of the group -- Ari Rubin and Cooper Stainbrook -- were taking a long walk around the Colorado capital when the market started to go haywire on Feb. 5." |
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Date: June 11th, 2018 3:25 PM Author: Laughsome Forum If I remember correctly, Buffet let these high-finance clowns choose the "best" funds so it wasn't like they didn't have every opportunity to select the "real" hedge funds that would consistently beat the indexes. I'd like to see long-term charts of the three funds you just listed. I know a couple of the Medallion funds have been amazing performers. The number of funds that have consistently beaten the indexes over a long period (15-20+ years) has got be be tiny. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224616) |
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Date: June 11th, 2018 6:11 PM Author: geriatric ticket booth national security agency minuscule if you exclude fees. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36225829) |
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Date: June 11th, 2018 6:52 PM Author: jet-lagged appetizing step-uncle's house double fault Subject: it kind of enrages me that so many ppl got filthy rich off this racket
but the gig is about to be up
i become more convinced by the day that the key to becoming obscenely wealthy is to aggressively practice borderline fraudulent behavior |
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Date: June 11th, 2018 7:58 PM Author: cordovan boiling water (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36226432) |
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Date: June 11th, 2018 8:10 PM Author: kink-friendly milk stock car Is the Warren Buffett/value method still applicable? Usually by the time *you* learn about it you've missed the boat already. You have to be in the right place at the right time, and prepared to take advantage of the situation. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36226520) |
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Date: June 11th, 2018 11:31 PM Author: kink-friendly milk stock car "Buffett has had harsh words for Wall Street before. In last year’s letter, he called investment bankers and others who advise on corporate deals short-sighted and opportunistic, arguing that Wall Street bankers often push for deals that are not in the best interests of companies just to make a fee." http://fortune.com/2016/02/27/warren-buffett-wall-street-earnings/ |
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Date: June 11th, 2018 11:35 PM Author: kink-friendly milk stock car “When CEOs or investment bankers tout pre-depreciation figures such as EBITDA as a valuation guide, watch their noses lengthen while they speak,” writes Buffett. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36228215) |
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Date: June 11th, 2018 11:52 PM Author: slate razzle property ape (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36228303) |
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Date: June 11th, 2018 11:37 PM Author: kink-friendly milk stock car The best part about Berkshire Hathaway (BRK.A) (BRK.B) CEO Warren Buffett's annual investor letters is that they always provide some kind of reality check.
This year, in one sentence, he takes on one of the biggest diversion tactics of all -- one promulgated by many companies as the way they should be viewed and then gullibly accepted by investors: EBITDA or earnings before interest, taxes, depreciation and amortization.
"When Wall Streeters tout EBITDA as a valuation guide, button your wallet," he wrote. https://www.thestreet.com/story/12463644/1/greenberg-buffett-tells-investors-to-get-real-about-ebitda.html |
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Date: June 11th, 2018 11:43 PM Author: kink-friendly milk stock car “People who use EBITDA are either trying to con you or they’re conning themselves." -Warren B. “I think that, every time you see the word EBITDA, you should substitute the word ‘bullsh*t’ earnings.” -Charlie Munger https://www.forbes.com/sites/brentbeshore/2014/11/13/ebitda-is-bs-earnings/ |
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Date: June 17th, 2018 12:33 AM Author: kink-friendly milk stock car There are apparently some hedge funds that consistently beat the S&P, but they're closed. No new investors. Those managers must be genuinely brilliant or have some special insight. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36258703) |
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Date: June 17th, 2018 12:43 AM Author: kink-friendly milk stock car Munger has also noted, "The investing world is just a morass of wrong incentives, crazy reporting and, I'd say, a fair amount of delusion." https://www.fool.com/retirement/2018/01/08/warren-buffett-just-won-a-10-year-million-dollar-b.aspx |
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Date: June 17th, 2018 5:50 PM Author: kink-friendly milk stock car I guess some people don't want to acknowledge that not everyone is going to be above average. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36261763) |