Why you'll never be rich

[NajdorfDefense]

[ QUOTE ]
you can almost always identify these people who can beat the market during their historical performance

[/ QUOTE ]

If you can't spot Warren Buffett after 10-20 years, or John Neff after 10-20 years, or Richie Freeman, or Glenn Greenberg, or James Simons, or Steve Mandel, or Richard Perry, or Don Sussman, or Bruce Sherman, or Greenblatt, or Dave Dreman, or Richard Snow, then you are clearly not paying attention.
If 40-60[-80-100]+ quarters of market-beating performance won't convince you, then you choose to remain ignorant, and wrong, at your own cost.
If 2+ decades of 20%+ returns, net, doesn't convince you a mgr is superior, then you'd rather have less money than more. It's that simple.

[NajdorfDefense]

[ QUOTE ]
The irony is that a very small minority of highly disciplined traders help make markets more efficient by systematically identifying and exploiting quantifyable edges.

This means EMT and anti-EMT camps are both right.

[/ QUOTE ]

No, it means the EMT folks are wrong, by definition. There should be NO systemic quantifiable or qualitative edges, and yet there are, and they remain, decade after decade.

[NajdorfDefense]

http://quicktake.morningstar.com/fundnet...p;fdtab=returns

Saul Pannell, to use one example of a fund I've been in for years, has doubled the market return in the past 10 years. Do you think that is wholly attributable to luck?

During the 2000-02 bear market, he beat the index by 22%.
Luck? Was this not easy to identify as a market-beating fund 4-5 years ago? Of course it was.

During the past 4 years, he beat index by 29%. Still luck?

[MatthewRyan]

A key point to remember here when talking about beating the market:

you need to have the same risk as the index (or market) you are trying to beat!

If you tell me that using small cap stocks and options you beat the market (sp500 as used here) over the last 5 years I would laugh.

[BeL0wMe]

[ QUOTE ]
http://quicktake.morningstar.com/fundnet...p;fdtab=returns

Saul Pannell, to use one example of a fund I've been in for years, has doubled the market return in the past 10 years. Do you think that is wholly attributable to luck?

During the 2000-02 bear market, he beat the index by 22%.
Luck? Was this not easy to identify as a market-beating fund 4-5 years ago? Of course it was.

During the past 4 years, he beat index by 29%. Still luck?

[/ QUOTE ]

Naj, since you seem to be the most knowledgable one here, can i get your takes on the following funds currently, and their outlook for 5, 10 years down the road:

DODFX (Dodge and Cox Int'l)
FAIRX (Fairholme)
FBRVX (FBR Small Cap)
JSVAX (Janus Contrarian)

[gazarsgo]

For every Warren Buffett there's an Enron...?

[hlacheen]

[ QUOTE ]
For every Warren Buffett there's an Enron...?

[/ QUOTE ]

For every great investor there's a fraudulent company?

huh?

[gazarsgo]

for every lucky investor who runs hot there's several dirty investors scamming the public. facetious and unhelpful, sorry.

Warren Buffet didn't make his money playing the stock market like people seem to describe in previous posts. He made his money investing enough money in companies to change/improve how they run...

[rsliu]

I'm going to throw some thoughts out there that are relevant to this discussion.

1. 75% of mutual funds, after fees, do not beat the S&P 500 over any time frame. This is well documented. More importantly, there does not appear to be any serial correlation between time frames; that is to say, mutual funds that performed well 5 years ago don't perform better than average now (average for mutual funds, which is worse than the S&P 500), and funds that perform well now won't necessarily outperform in the future. In practical terms, this makes it extremely difficult, if not impossible, to consistently choose winners for mutual funds.

2. Over any time frame, there will always be winners due to random chance, simply because the number of players is so large. Buffett himself made this point in his coin flip tournament analogy. Look it up for a more in depth discussion of this point.

[Jeffmet3]

Large cap, "beating" the market is damn near impossible because inefficiencies have been worked out.

However, for Small Cap and International, I definitely believe that experts with a wide range of information and contacts at their disposal can beat the markets