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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (43866)	8/11/2011 1:28:58 PM
From: Jurgis Bekepuris	Respond to of 78516

Paul, Even though I make fun of "performance", in the end performance is the only thing that matters (to me ;)). So if I could go back to the past and switch from BRK to $$$$ stock that went up 10x, I would do it without thinking. Sure, one can make all kind of explanations and justifications why BRK was a good choice/investment then. It was more stable, it was less likely to go kaboom/BK, it is a great company run by a great CEO, and so on. And you are right that some of these explanations/justifications are forgotten post-factum and that they matter in some way. Professional portfolio managers would talk about risk/volatility/beta/sector allocations, etc. There is some reason in that too. Do I complain that I bought and held BRK? Not really. I am just using it as an example how it is very difficult to pick the best performers. I think you said that yourself about the stocks you "favor" - that they don't necessarily end up your best performers. :) So the switches to/from things sometimes are just futile. And if they don't work out performance-wise, they are sometimes rationalized/justified post factum, which is bad. Maybe in other words: if someone chooses to invest in AAAA vs. BBBB and says at that moment that they are choosing low volatility/less risk/great company and are potentially sacrificing better performance in BBBB, then it's fine. If someone invests in AAAA vs. BBBB on hunch or thinking that AAAA will outperform BBBB and then two years later looks back and sees that BBBB outperformed AAAA and starts looking for another justification why he bought AAAA, then it's probably not very useful or productive.