What was the greatest stock market buying opportunity in the last 20 years? The GFC where the market dipped to insanely low levels in 2009. Returns from that period through today:Holding a simple Vanguard 500 fund outperformed Berkshire by 1.3% per year with lower volatility and a higher Sharpe ratio. Has Buffett lost his mojo or is this just an unusual period that flummoxed many alpha generating managers? Doesn't matter really as he's 93. You can't teach someone else alpha generating tactics. So what managers will take over for Buffett is a whole new era of guessing as to whether the company will make smart trades and acquisitions. It squandered the last opportunity even with Buffett and Munger at the reigns. A single stock, even a holding company with many positions, is still vastly more risky than the market.
This is why we are Bogleheads. Low cost index funds of the total market don't require everything to fall in line in your favor and on your ability to guess if fund managers will outperform or have a higher risk-adjusted return.
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Portfolio InitialFinal CAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino RatioMarket CorrelationVanguard 500 Index Inv$10,000$84,123 15.08% 15.13%38.10%-18.23%-23.95% 0.951.531.00Berkshire Hathaway Inc$10,000$70,886 13.78% 17.21%32.70%-12.48%-23.15% 0.781.380.64This is why we are Bogleheads. Low cost index funds of the total market don't require everything to fall in line in your favor and on your ability to guess if fund managers will outperform or have a higher risk-adjusted return.
Statistics: Posted by TimeIsYourFriend — Sat Apr 20, 2024 6:30 am — Replies 17 — Views 1580