Yeah: Beardstown ladies. They are still teaching us a lot.
Never trusted their numbers. Never. Every time I thought of them, I always asked myself these questions and in this order:
1. How could these nobodies have a better record than Warren Buffett?
2. How can people who have real lives like these folks - outshine professionals who spend their entire business lives - and a lot of their personal lives -picking stocks and who have tons of backup resources and access to info. which The Ladies don't have? (And that's the whole schtick right... bunch of grey haired grandmas from nowhere doing so great and compared to the sophisticated city boys of Wall Street-- anybody can do it, folks.)
(Actually, I have a couple of answers for why they could be so very good: this per B. Graham which is that in investing - it's the only activity where the more you do, the more you try, the less good you might do yourself. Or Phil Carret in "A Money Mind at Ninety": having a money mind is a gift. You've got it or not. -- I don't like either of these answers -g-.)
3. So how come these ladies aren't rich? Given all that compounding for so long. Or if they are rich, so how come they don't live like they're rich? (I've got an answer for that too: Value investors live cheap (Graham and Mike Price being the only two exceptions that come to mind now)). Or is it because compounding a couple of thousand bucks at at real good percentage over 14 years is still not enough to make much of a difference. ($2000 x 1.23**14 = $36,000) Unless of course you're a folksy, white-haired, grandmotherly, venerable septageniarian who's avowed purpose is "education" and who enjoys being a media darling and getting cash advances from book publishers.
(Okay, okay, I admit that was a little sarcastic and I liked it -g-. But really, there are still some very good learnings we need to take away from these ladies, their books, their media rise, and their subsequent predicament.) |
