Reginald, I'll let you and Wayne handle the discussion of CAPM as I have no knowledge of the subject. But, I believe your jump to your conclusion to be rather strained.
<As for Buffet, I am sure he is a terrific investor, but many of
his followers fail to take into consideration the momentum and
size of his capital, which serves to drive his returns. They also
fail to take into consideration his active involvement with mgmt.
which has a lot to do with success and failure (think of the
terms he got on the Solomon preferred, then think of the control
he had when Solomon got in trouble). Soros, whose stated returns
appear to be greater than Buffet's, does not get the same reverence
or respect. I wonder why...>
It seems that for years folks have been trying to put forth the proposition that Magellan's under-performance was due to its massive size. Most of my general reading has indicated that size is a disadvantage not an advantage. I believe that his superior returns have more to do with his astute observations and timely acquisitions, which creates the momentum, and not the other way around.
To use the Solomon experience as indicative that he takes an active role in management is flawed. He clearly viewed it as a role he did not want and exited as soon as possible. His active involvement was necessary to protect "his" shareholders and their investment. Would Soros make a billion dollar investment in a company and then hand the voting rights to the shares back to the management of the company?
I'll be honest that I haven't seen the published performance record of Soros. But, certainly you don't mean do imply that they approach investing from a same perspective? Buffet[t] has made Buy and Hold an investor reality. He's not generally thought of as one who is into quick, speculative plays. Soros on the other hand, well ... I'd like to see their portfolio turnover statistics.
Again, the discussion is interesting, but the conclusion was a stretch.
Berney |
