Re: [amibroker] OT:Technical VS Technofundamental trading

[investeng@xxxxxxx]

In a message dated 02/13/05 11:39:27 A.M. Central Standard Time, howardbandy@xxxxxxxxx writes:

Greetings –

        I found these statistics on a website called warrenbuffettsecrets: In 47 years, Buffett’s investment company, Berkshire Hathaway has achieved returns of 259,485% versus the S&P 500 returns of 4,783%. The difference in results is an astonishing 254,747%! 

In my opinion, there is a more meaningful way to compare the two percentages you describe.

(Without making any judgment about the accuracy of either overall investment gain, but just examining the numbers.)

An 18.2% annual gain, compounded for 47 years, produces the 259485% overall gain of Buffett’s company.  An 8.5% annual gain, compounded for 47 years, produces the 4783% overall gain of the S&P.  The comparison is between 18.2% and 8.5%.

Thanks,

Howard

I respect Buffett's record but there is one minor fact that has been missed. I presume that the S&P return of 4,787% was a return based on buy-and-hold, i.e. the S&P wasn't subject to buying at the bottom and selling at the top based on timing.

 

The Buffett portfolio was not a strict buy-and-hold, but he did liquidate positions, i.e. was not a strict buy-and-hold. Buffett had the benefit of selling to remove possible future losses.

 

 

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