Reblog: Only a Market Crash Can Stop Warren Buffett From Winning This $1 Million Bet


It was a $1 million bet: Could hedge funds outperform index funds over a decade?

Warren Buffett said no in 2007. Now it looks like the billionaire investor was right.

His chosen index fund, the Vanguard 500 Index Fund Admiral Shares, climbed 66% from the start of the bet through the end of 2015, compared with a gain of 22% for a basket of hedge funds selected by asset manager Protégé Partners, including fees.

The $1 million bet with Protégé Partners ends Dec. 31. At this point, it would take a massive stock-market drop for Mr. Buffett to lose. An extended bull market and sub par performance by many hedge funds since the 2008 financial crisis have helped his case.

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Reblog: Mohnish Pabrai’s Approach To Beating The Market


Mohnish Pabrai, managing partner of Pabrai Investment Funds, speaks during the Value Investing Congress in New York. Photographer: Daniel Barry/Bloomberg News

Since inception, Mohnish Pabrai has beat the stock market by triple digit returns. What was the key to his success? Pabrai would argue nothing unexpected or surprising.  In fact, he attributes his massive success to a keen sense of cloning other super-investors like Warren Buffett and Charlie Munger. On the investing podcast, Pabrai discussed a range of topics to help explain his way of thinking and methods for achieving such strong performance.

Preston Pysh: [2:29] You have an IT background that not a lot of people know about. Would you have taken a different career path if you had found value investing first?

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Reblog: Go for the Million!


If you already have a million dollars or more, this blogpost is not for you.

For all others, I’ll cut the bullshit and get to the chase. I am just mighty pissed off.

When you have less than a million dollars –

Please don’t listen to any or all the Gurus who are propagating 16% CAGR, 18% CAGR, 20% CAGR. You know the usual spiel. Say, you have 5 Lakh rupees. Gurus recommend that you should be happy be 18% CAGR or 20% CAGR and over a long period of time (40 years), you would be so rich, that even the rich would be ashamed.

Bullshit.

For all those studies, where you read that if you had invested in quality at any price, and just held on to them for a long period of time (40 years), you would have made enough money to be proud of yourself.

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Reblog: Quality Companies, Compounders and Value Traps – Investment Masters Class


sees-candy

Many of the great investors evolve over time to focus on high quality companies.  In the post ‘Evolution of a Value Manager’ I outlined how Buffett, with insight from Munger and the acquisition of See’s Candy transitioned from seeking cheap companies [ie cheap PE/, price/book etc] to trying to purchase high quality companies at reasonable prices.  Li Lu and Mohnish Pabrai are two Buffett disciples who have made a similar transition.

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