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

To: mopgcw who wrote (54685)	1/2/2015 3:00:43 PM
From: Jurgis Bekepuris	Read Replies (3) \| Respond to of 78618

Thanks for your thoughts. Couple comments: Consider as you note yourself, stocks average 7%. Your 10-year return is 10%. those 300 bps are extremely valuable to you. My guess, which is tough to verify is that most of the 300bps is due to 88% return in 2009, which might be luck and not skill. Why give them up because you had a couple bad years. As an investor, you do need to look at the longer horizon. I disagree. 3+ years of underperformance in bull market is a real issue. Sure, if I had a good reason why this would change, I could continue. E.g. I invested in insurance company and mega cat killed it - tough luck, it may recover, etc. However, I don't see that. The mistakes are pretty much bad stock selection. And I am not sure I can improve it. :) Your perceived hurdle of 15% to 25% might be unrealistic. In bull market, it isn't. In bear market - well, I saw how my portfolio behaved during the drops and I am pretty sure it would not have outperformed there either. BTW, to both you and Paul Senior who are harping about Buffett's special deals: IMHO the secret of small investor outperformance is also "special deals". I.e. invest into small-cap special situations with catalyst if you want to get 20% annual. Not just buy cheap stocks or somewhat cheap Buffett-y stocks. :) Sure, easier said than done, but that's really the place where small investors can get super results. Read Greenblatt "You can be a stock market genius", but then you have to apply it to current times. ;) I'll generalize, but IMHO Graham "cigar butt" investors can outperform market, but usually not by much (maybe 2-3% a year). Good growth (even GARPy growth) investors can outperform market by 5-10% per year (outstanding ones can do better). Good special situation investors can outperform market by 15-20% per year. Anyway, these are just my thoughts, I don't claim that they are really true. :)