Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Paul Senior who wrote (44452)	9/21/2011 9:09:40 AM
From: Jurgis Bekepuris	Respond to of 78519

Maybe you said "When I looked at the DJ utility index" in some other post. You did not mention that specific index in the post I replied to. Never mind though, since I provided a chart of IDU which is presumably "DJ utility index" and, yes, you are right, it has beaten S&P since IDU's establishment. But so has DOW. And equally weighted indices ( valueweightedindex.com ). And probably commodity indexes. And emerging market indexes. IMHO, it's very easy to look back and say "look here's my favorite index and it has beaten my hated index". You do have a point that very few investors beat "better" indexes. And if you start picking "better" indexes post-factum, then almost no investors beat them. Not sure what you can learn from this though, since it's not clear that the lessons are applicable for the future. Would you suggest that utility index (or commodity, or emerging market, or value weighted) will beat S&P for the next 3, 5, 10 years? Returning to your statement: if somebody says or presumes or intends to be a good stock picker, they might get a dose of reality if they compare themselves to what utility stocks have done over any five year, ten year, or longer period. I still disagree. Sure on one hand you, Mike Burry and Warren Buffett outperformed the utility stocks, so it's not a very high barrier to jump over. However, I'm concerned that this leads to "best" index post factum picking and claiming that no investor can outperform "best" index.