In the KnowledgeBase I wrote the following:
A number of people were very skeptical when I first said I had made 30% per year in ordinary markets. Some even implied that I must be lying, that even Warren Buffet couldn’t do it. (But he was investing billions of dollars, like piloting a battleship instead of a speedboat. He had to buy whole companies, for God’s sake!)
I got a routine Thomson Reuters news story today from Schwab, but this one was entitled “Buffet’s Berkshire Suffers in Pandemic.” So I looked up YTD price on Berkshire and discovered that Berkshire is down 7.6% YTD. That’s not only MILES AND MILES below my current up 211% ytd, but is way behind (15%) even the S&P which is currently actually UP 7.7% ytd.
We are very fortunate that our portfolios are at a scale where we can enter or exit a position if not immediately, at least reasonably promptly, if necessary. We should take advantage of that when needed.
I also wrote: You can beat any mutual fund over the long run. You can’t tell much from a mutual fund’s results because you are always buying last year’s results. For example, if it’s a oil company fund, and last year oil stocks were in, it will show great results, but this year it could do terribly. Also, you are always buying the results the fund had when it was much smaller and nimbler than it is now, because those good results they had when they were tiny made people pour money in.
Add to that that the mutual fund manager is saddled with rules like he has to have a minimum of 50 or 100 positions, and maybe he has to diversify his positions. He/she also has higher-ups looking over his shoulder and asking why he bought this odd-ball company or whatever. Finally his stockholders close out their positions when they get scared at market bottoms, so he has to liquidate shares at the bottoms. He doesn’t have a chance of competing with us.
So take advantage of what we have.