bchadwick Wrote: ------------------------------------------------------- > > Logically, we are either all equally good > investors (unlikely) or someone (or group, if we > allow ties) has to be the greatest. > I disagree. It’s that people aren’t playing the same game and even if they were, there are all sorts of definitional things about “investor”. 1) Who is the greatest baseball player of all time? (Who knows?) 2) Oodles of people have made more money than Buffett, Soros, Peter Lynch, John Paulson, etc. by being entrepeneurs. Why buying someone’s company is different than buying someone’s land and putting oil wells on it is not clear. FYI - JD Rockefeller is the best entrepeneur ever, because he made the most money doing it. 3) The rules have changed. Crassus made lots more money by investing than WB, but if he didn’t like someone he would just have them killed. WB can’t do that, yet.
the correct answer in 2008 to any question that asks who the greatest **blank** is… is of course: Obama He is the greatest investor of all time because, because msnbc said so, that’s why. If he wanted to he could crush buffet’s GE and GS trades before breakfast. He won’t of course because he loves mentioning that he gets advice from the other oracle. I guess that was kind of snarky. What I meant to write about was the notion that value investing as defined by Buffet is arguably difficult to employ. I recall one of his speeches where he mentions a pension or two he consulted on and steered it to use a fundamental value approach (Wash post maybe) anyway he goes on to mention that not many pensions maybe none employ that strategy. I mean, you want to buy a dollar for $0.40. That is a concept educated people should grasp and flock to. So why don’t large endowments and pensions employ that strategy more? or at all? I think it is because it sounds great, but it could take 5-years, 10-years, forever, to reflect fundamental value. And uh, managers, trustees, consultants, etc. would get fired long before then. So there is an inherent bias / incentive for managers to correlate returns with a benchmark. So if you are looking to crown the best investor, the criteria might have to segregate those that speculate from those that invest. Buffet is clearly on the short list of the most successful investors and to that I would add that he is one of the least likely to be fired if he is wrong short-term i.e. GE, GS. That oracle status gives you a longer leash and the opportunity to patiently wait for it.
If we are going to talk about the ability of hedge funds to produce a good return for investors over the long term, this thread needs to at least contain the word Soros in it… the quantum fund did its investors no harm over 30 odd years…
Well, yeah, I was being academic/pedantic, but not for the sake of being pedantic - these sorts of “who was the best X” always beg the question of “what’s the criterion for best,” which is much more interesting (and informative) to think through. So what would go into “who is the best investor.” 1) Who made the most money? 2) Who captured returns from the most unobvious-before/super-obvious-afterwards insight? 3) Who took best advantage of opportunities available to them (which presupposes you know what those opportunities where, and what the return on alternatives would have been). 4) etc… JoeyDVivre Wrote: ------------------------------------------------------- > bchadwick Wrote: > -------------------------------------------------- > ----- > > > > Logically, we are either all equally good > > investors (unlikely) or someone (or group, if > we > > allow ties) has to be the greatest. > > > > I disagree. It’s that people aren’t playing the > same game and even if they were, there are all > sorts of definitional things about “investor”. > > 1) Who is the greatest baseball player of all > time? (Who knows?) > > 2) Oodles of people have made more money than > Buffett, Soros, Peter Lynch, John Paulson, etc. by > being entrepeneurs. Why buying someone’s company > is different than buying someone’s land and > putting oil wells on it is not clear. FYI - JD > Rockefeller is the best entrepeneur ever, because > he made the most money doing it. > > 3) The rules have changed. Crassus made lots more > money by investing than WB, but if he didn’t like > someone he would just have them killed. WB can’t > do that, yet.
Bchadwick - When i think ‘invest’, i think of creating value. An important criterion for me would be one which accounts for the amount of value created for others and not solely the investor. Ie. John Paulson made a killing last year as an ‘investor’…but how much value did he create for others? Was it a transference of wealth or true value creation? (both?) Believe me, i don’t know, nor know enough to attempt an answer, i just think it’d be an important aspect to consider.
Paulson provided liquidity to markets that were asking for it thus contributed to efficient pricing in that market. How much “value” that creates is a tough question.
bchadwick Wrote: ------------------------------------------------------- > Someone has to be the greatest investor of all > time - I wonder what criteria one would use to > judge it. Annualized risk adjusted excess returns > over a 15+ year period, I guess. > > If not Warren, then who, and why them? Paul Tudor Jones?