As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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Monday, 1 March 2021

The truth about Warren Buffett’s investment track record : Morning Brief

Read? The truth about Warren Buffett’s investment track record : Morning Brief

Great stock pickers pick a lot of losers

And just because Buffett may be one of the greatest stock pickers in history doesn't mean all of his stock picks have been winners over time.

Just a quick glance at Berkshire's current top 15 stock investments reveals plenty of positions that are held below cost (i.e. they've lost money).

It's not hard to find times Buffett lost money on a trade or missed out on a big opportunity. Just a year ago, Berkshire dumped airline stocks near their lows just before they roared back along with the other reopening trades.

But a successful investor shouldn’t be judged by his or her mistakes. Rather, they should be judged by the degree to which they are able to achieve their long-term goals.

This goes for all investors who will repeatedly buy too late, sell too early, and miss out on big opportunities that become obvious in hindsight.

So if you're making a lot of mistakes but have a sound strategy and the discipline to stick to it during periods of underperformance, then maybe you too can be as imperfectly successful as Warren Buffett.


10 comments:

  1. Well, the largest stock pick that Buffett made in 2020 was on himself, or rather his company Berkshire lol. $24.7B of share buybacks.

    I think that's a smart move when Berkshire is loaded with cash & its stock is out of fashion & depressed. Too many companies do buybacks at the wrong times or for the wrong reasons.

    By reducing outstanding shares by 5%, it's like giving 5% dividends, but without the taxes (income tax for Americans & withholding tax for foreigners).

    Singapore dividend investors are so lucky LOL.

    ReplyDelete
    Replies
    1. Singapore dividend investors are so luck but sotong so no 1,000% capital gains. ha ha!

      Delete
    2. Ouch!

      This is the year we so called "financially literate" people talk a bit softer...

      Especially when youths or old fogeys with steel bxxls have beaten us hands down by concentrating in Tesla or Cryptos ;)


      Its refreshing to see yield hogs eating humble pie - can't beat CPF...

      And I believe some CPF voluntary contributors must have 2nd thoughts when they see their peers doubling or tripling their money...

      Choose our poison:

      Earn More - Win very sexy with bragging rights; lose kenna sia...

      Save More - Bear market smug like nobody; bull market looked like an idiot...


      Maybe hybrid the best?

      This way we can always be half-right or half-wrong :)

      Delete
  2. Aiya, cannot be everytime wins lor. I lost money during the early days, slowly learned from my lesson and tried not to make the same mistake again. Overall, its the belief that kept me on the path despite the early setbacks.

    ReplyDelete
  3. Everything in life must base on something, be it beliefs, principles, art(imagination) or science.

    But nobody can disregard the time factor aka a time to buy, a time to sell.

    And the best is of course U can afford to disregard the time factor but U will die one day too.

    Then hopefully there is the next person to take over.

    ReplyDelete
  4. Ehhh, a quick glance at Warren's top 15 public stock investments doesn't reveal plenty of positions that are held below cost leh...

    Only 3 ... and all are only very slightly in the red.

    On the other hand, some of his well-known winners are winning BIG e.g. Apple, Coke, Amex.

    Pareto principle for Warren! 😂

    ReplyDelete
  5. Mistakes are inevitable in investing since this activity deals with uncertainties and probabilitites. If a person wants to avoid losses, then he'd better stop investing. Can't think of any other alternative.

    Since losses are unavoidable, the key is to make sure that losses, when they come, don't come in such huge amounts that they put us out of the game.

    ReplyDelete
    Replies
    1. Having through few market cycles; I realized that money management and position sizing will enable us to achieve Pareto investment return in our long-term portfolio.

      Delete
  6. Even investing in ETF and Index funds can cause a disaster when they are of the syntectic kinds, lol.

    ReplyDelete

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