Re: Too Much Information
 

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"Let's say I offer you a bar of gold. You know, for a fact, that it is 100% real gold. I hand you the bar of gold, which is about as big as your phone, but you are not allowed to weigh it or in any other way attempt to determine its mass, volume, etc. Then I tell you that I'll sell you the bar for $50. Now do you care what the hell it's worth?"


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Definition of what makes a great investment...

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I'm not following. Is this sarcastic, serious, something else?

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I'm baffled shouldn't this bar of gold be well into the five figure range? I mean if every case was this easy, I'd just take free money that people are handing out and sit around all day.

Re: Too Much Information
 

hawk59, DesertCat, and TAs,

Where can I go to find information on historical P/Es of different sectors in the stock market? After reading hawk59's post, I realized how the data can help me gauge a company's value amid Mr. Market's psychopathic behaviors.

Re: Too Much Information
 

Wow, sometimes I guess you really have to spell it out.

HERE WAS THE POINT OF WHAT I SAID

You can tell it worth a lot, and more importantly, a lot more than you're going to have to pay for it. You don't know exactly what it's worth and you could easily be off by 20% or more if someone asked you to fill in the value of the purchase. However, those limitations notwithstanding, it is still an obviously good idea to buy the gold.

Re: Too Much Information
 

To add the obligatory Buffett quote..
"It is better to be approximately right than precisely wrong."

Also, Gladwell's Blink seems to be very relevant to this discussion. He talks about how thin slicing can be more effective than people with more information in the examples of determining divorce, diagnosing heart attacks, hiring employees, etc. There are two things that Gladwell talk about that I think are important with investing. One is thin slicing exemplified with Buffett where he ignores the vast majority of information available to him. The other is snap judgements and the subconscious where experience investors like Soros thrive. He used to say he followed the "theory of reflexivity", but then later said that the theory was bogus and could be ignored. His son Robert said,

"My father will sit down and give you theories to explain why he does this or that. But I remember seeing it as a kid and thinking, Jesus Christ, at least half of this is [censored]. I mean, you know the reason he changes his position on the market or whatever is because his back starts killing him. It has nothing to do with reason. He literally goes into a spasm, and it's this early warning sign."

Re: Too Much Information
 

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Wow, sometimes I guess you really have to spell it out.

HERE WAS THE POINT OF WHAT I SAID

You can tell it worth a lot, and more importantly, a lot more than you're going to have to pay for it. You don't know exactly what it's worth and you could easily be off by 20% or more if someone asked you to fill in the value of the purchase. However, those limitations notwithstanding, it is still an obviously good idea to buy the gold.

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Sorry, you know... Text has limitations with stretched examples and I kinda glossed over when I read through that Wynn stuff. Rereading it makes it very easy to understand.

Me: -1

Re: Too Much Information
 

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I have always been amazed by the simplicity of Warren Buffett's approach. He does not have seas of analysts (I don't believe he may have any) nor does he do excessively deep diligence dives into companies.

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lol

I agree with the author's conclusion but his premises are kind of weak and seem to based on stuff he made up.

Re: Too Much Information
 

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I have always been amazed by the simplicity of Warren Buffett's approach. He does not have seas of analysts (I don't believe he may have any) nor does he do excessively deep diligence dives into companies.

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lol

I agree with the author's conclusion but his premises are kind of weak and seem to based on stuff he made up.

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Not that I'm any kind of expert here, but I do know that Berkshire employees a tiny staff. I think less than 15 people work there. Compare that to other institutions that manage the kind of money that he does and it's a pretty glaring difference.

Re: Too Much Information
 

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I have always been amazed by the simplicity of Warren Buffett's approach. He does not have seas of analysts (I don't believe he may have any) nor does he do excessively deep diligence dives into companies.

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lol

I agree with the author's conclusion but his premises are kind of weak and seem to based on stuff he made up.

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Not that I'm any kind of expert here, but I do know that Berkshire employees a tiny staff. I think less than 15 people work there. Compare that to other institutions that manage the kind of money that he does and it's a pretty glaring difference.

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I don't know about performance related statistics, but I have also found it very interesting how some $1-5 billion hedge funds and private equity funds employ a total of like 10 people and others employ 50. Would be interesting to see how this correlates.

Re: Too Much Information
 

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I have always been amazed by the simplicity of Warren Buffett's approach. He does not have seas of analysts (I don't believe he may have any) nor does he do excessively deep diligence dives into companies.

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lol

I agree with the author's conclusion but his premises are kind of weak and seem to based on stuff he made up.

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Not that I'm any kind of expert here, but I do know that Berkshire employees a tiny staff. I think less than 15 people work there. Compare that to other institutions that manage the kind of money that he does and it's a pretty glaring difference.

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I don't know about performance related statistics, but I have also found it very interesting how some $1-5 billion hedge funds and private equity funds employ a total of like 10 people and others employ 50. Would be interesting to see how this correlates.

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The one with less employees but has the same capitalizations as other hedge funds obviously have a really really smart guy calling most, if not all, the investing shots.

For example, ESL and Berkshire don't have that many employees. The reasons are Eddie Lampert and Buffy.

Post deleted by Mat Sklansky