So who do you think is the world’s very best investor? I think to really have a good argument for being the best, you need to be investing a pretty big portfolio, say at least 1B (ideally greater) for at least a 10 year period. There are people who have made amazing returns with portfolios in the millions and hundred mllions, but I believe true skill is compounding large amounts of capital at high rates, something indeed very very rare.
I’ll throw out:
Seth Klarman, Ray Dalio, Peter Lynch off the top of my head.
I would exclude Warren Buffett, because I see him as running an operating company rather than a fund.
Since you excluded Warren Buffett, I would have to say the next greatest is either Peter Lynch for equities, or Bill Gross for bonds, or George Soros for hedge funds.
In fact, that might be my “Mount Rushmore” of investors.
(FYI - I also have a lot of respect for John Bogle, because he’s done so much for the investing public as a whole. But I don’t know if he’s really a great “investor”, because he’s really more of a freerider on other investors’ backs.)
I don’t know why you’d exclude Buffett. I disagree that he’s primarily an operating company. He uses his insurance profits to invest, sure, but I think if you look at the sources of BRK wealth, much has come from great takeovers and investments.
Berkshire is a diversified conglomerate of a range of private firms and public equities levered up by insurance float (which is greater than 70B). I think you would agree that it is very different from running your basic hedge fund. This zero cost float also gives Berkshire free leverage, so they can make an average investment and still get an above average return.
His record with his partnership was of course exceptional, but it was also a much smaller partnership than the current behemoth of BRK.
That’s fair, but I’d just call that part of his strategy. He’s still investing. He choses to do so with insurance float and through the arrangement he runs. Others choose hedge funds, or private equity. Perhaps the hedge fund guys should buy an insurance company and gain that advantage? Who knows. It
In other words, the vehicle you choose is kind of the platform for your investment strategy and therefore performance. A big source of Buffett’s alpha is likely his platform. And good on him for that.
Sigh. The hedge fund guys can’t just buy an insurance company and gain that advantage because very few such insurance companies exist. There is a lot more going on in Berkshire than simply Warren’s investments. Whereas with a HF, you can isolate investment ability - which is the point of this thread.
Groan. To answer this question is a dupe’s errand. The question is predicated on the notion that 100% of investment outcomes are solely generated by the investor’s skill – which is almost never the actual condition. Fawning over Buffett, Simons, etc., etc. and believing that “learning” from them or mimicking their “investment styles” is the very crux of the rampant Casanova Problem in finance today.
It is an open question. We may believe returns are important, but processes and statistical confidence in whatever results can be seen are also important. I don’t think posters here are ging by returns alone, or are directly equaling returns and skill.
Simons has better returns than Soros, but I don’t know his process and for all I know it is very vulnerable to specific events (financial transaction taxes could break his models if they’re dependent on high speed trading). I put Soros over Simons because of the process, not because of the outcomes.
Buffet has more money and fame than Soros, but while Buffet always took just a few decisions a year, Soros took many more. That’s actually Taleb’s argument to believe Soros probably has more investment skill, and I agree with that. Nothing is guaranteed, but a billionaire trader has a much bigger number of decisions than a billionaire value investor. In my opinion that counts for something.
Of course we’re just taking guesses here, but the same happens with questions about the best all-time boxer or best president, and yet they can be entertaining.