marginofsafety

I think you guys might find this interesting.

https://www.valuewalk.com/wp-content/uploa...

It's taken from a book called "Excess returns". The link shows the highest recorded CAGR achieved by lots of the world's most famous investors. Book was published pre-2015 so the CAGR should be updated to as of 2010-2015.

donaldchin

Reply to @marginofsafety : Thk Margin of safety, use some of their techniques, great to know their great records.

  View More Replies
bgting

Attached is a letter from Buffett showing Walter Schloss' record over 40 years from 1955 to 1995 on page 3.

Schloss took 25% of profit while managing funds for others. If there were any losses , the losses were made good in the following years before he shared in any profit.

The difference between the Ltd Partners Overall Gains and Associates Overall Gains is due to this fee arrangement. So over the 40 years, the Ltd Parters Overall Return was at the compounded rate of 15.7% and the Associates Overall Return was at the compounded rate of 20.4%. In comparison, S&P return was at the compounded rate of 10.4%.

Out of the 40 years, he had 6 years of losses compared to 10 for index. If we key in the numbers from the 2 columns in a spreadsheet, for those positive years, the Ltd Partners' return is about 75% of the Overall. For negative years, they are the same. For positive years following negative ones, the Ltd Partners received higher percentage to make up for the losses.

His largest drawdown over 40 years was -12.8% in 1990. Largest for the index was -26.6% in 1974 while he was down -6.2%

An old post ... :-)
https://www.investingnote.com/posts/21566

marginofsafety

I don't think you can put enough emphasis on patience. There's a story being told by Greenblatt about the guy who wrote "What Works on Wall Street".

In "What Works on Wall Street", the author backtested about 40 formulas and found out which formulas worked out best in the long run. He went on to start a fund and decided to put the money into the formulas which produced the best long term results.

However, things didn't went his way and he ended up terribly under performing the market for 3 years. He couldn't take it and sold his fund mgt biz to someone else.

That guy who bought over the fund mgt biz decided to continue using the same methods and what ended up happening was that he found tremendous success using the same strategies afterwards.

So this is a story about the guy who wrote the book, who did all the studies and who knew what strategies worked over long periods of time, quit and sold his fund mgt biz to someone else. Morale of the story is that sometimes being smart is not enough. Having the patience, temperament, is just as, if not more important.

wellhandy

Reply to @marginofsafety : nothing works all the time. I'm keeping value investing in my pocket for the period when it will shock people in its outperformance again. :)

edited: and having said that, i realized how silly and smug I sound. lol. shakes head.

  View More Replies
View More Comments (4)