No one knows Klarman's performance and his book Margin of Safety is mostly a grab bag of generalities as are his interviews. Re Greenblatt, lots of people outperform over short periods of time just like if you take a large enough sample someone will flip 100 heads in a row or something similar. Peter Lynch outperformed for a short period of time based on the strategy buy what you know. Works when consumer products are in favor. Not when biotech is hot.
Most of the investors in "private equity" will likely be fleeced by the wolves through hidden fees and mediocre performance. The issue for the rest of us is that the possibility of shortfalls in retirement saving will have to be made up by Uncle, i.e. the taxpayers.
Peter Lynch managed money for a very short time & his style - buy what you know fit the time - consumer stocks were in vogue. In the short run it is impossible to distinguish luck from skill and even WB has been mean reverting over the last two decades. Diversification is a free lunch. A concentrated portfolio is gambling & over the short run gambling can be successful.
One issue to consider in deciding whether volatility is a good measure of risk seems to depend on whether you are persuaded there is mean reversion. The data series is too short to know the answer to that - in the past the US has exhibited mean reversion while some foreign markets havent.
On the one hand the writer says risks are priced in and on the other hand he seems to say there are bargains overseas. How does he know which risks are and are not priced in? Also, how many years of underperformance would convince the writer that international diversification was an idea that did not pan out?
This is poor advice since anything that is generally known, e.g., the quality of a country's institutions, is already reflected in the price of the stock- that is a basic concept in finance.
Two observations, Jonathan - first, we human being do not have the ability to make predictions with 100% probability. I am sure you have made that point 1,000 times over the years. Second, a book that helped me think about the end of one's days is Atul Gawande's "Being Mortal" -- which deals with the practical aspects of death, in particular the death of his father and how his father chose to deal with the limited days left.
Comments
No one knows Klarman's performance and his book Margin of Safety is mostly a grab bag of generalities as are his interviews. Re Greenblatt, lots of people outperform over short periods of time just like if you take a large enough sample someone will flip 100 heads in a row or something similar. Peter Lynch outperformed for a short period of time based on the strategy buy what you know. Works when consumer products are in favor. Not when biotech is hot.
Post: How to Beat the Market
Link to comment from August 23, 2025
Most of the investors in "private equity" will likely be fleeced by the wolves through hidden fees and mediocre performance. The issue for the rest of us is that the possibility of shortfalls in retirement saving will have to be made up by Uncle, i.e. the taxpayers.
Post: Hedge funds, venture capital. private equity, etc. in a 401k. BAD IDEA!
Link to comment from August 9, 2025
Peter Lynch managed money for a very short time & his style - buy what you know fit the time - consumer stocks were in vogue. In the short run it is impossible to distinguish luck from skill and even WB has been mean reverting over the last two decades. Diversification is a free lunch. A concentrated portfolio is gambling & over the short run gambling can be successful.
Post: Spreading Your Bets
Link to comment from April 12, 2025
One issue to consider in deciding whether volatility is a good measure of risk seems to depend on whether you are persuaded there is mean reversion. The data series is too short to know the answer to that - in the past the US has exhibited mean reversion while some foreign markets havent.
Post: Taking It Personally
Link to comment from February 8, 2025
Wow - hard to believe someone could write an inspirational column on remodeling a bathroom.
Post: Model Behavior
Link to comment from December 21, 2024
On the one hand the writer says risks are priced in and on the other hand he seems to say there are bargains overseas. How does he know which risks are and are not priced in? Also, how many years of underperformance would convince the writer that international diversification was an idea that did not pan out?
Post: Stuck at Home
Link to comment from November 23, 2024
Sensible advice as usual.
Post: Advice for the Kids
Link to comment from November 9, 2024
This is poor advice since anything that is generally known, e.g., the quality of a country's institutions, is already reflected in the price of the stock- that is a basic concept in finance.
Post: Built for Success
Link to comment from November 2, 2024
Two observations, Jonathan - first, we human being do not have the ability to make predictions with 100% probability. I am sure you have made that point 1,000 times over the years. Second, a book that helped me think about the end of one's days is Atul Gawande's "Being Mortal" -- which deals with the practical aspects of death, in particular the death of his father and how his father chose to deal with the limited days left.
Post: The C Word
Link to comment from June 15, 2024
Jonathan, I have been reading your always excellent work since your WSJ days and wish you the best.
Post: The C Word
Link to comment from June 15, 2024