Recently, after posting a gain of over $20bn (14%), Buffett called his performance for the year "disappointing". He has one of the greatest track records in history and an approach that is dictated by fundamental value investing.
Admittedly a lot of his great plays recently have been helped out by government bailouts / policy but in my opinion he still has a track record that can only really be rivaled by someone like Soros; these guys have made money in every single environment and are clearly not just leveraging beta.
Thoughts?
I think its really difficult to measure his skill as an investor, he simply has such a powerful influence over the markets; if he buys something, it'll go up. This being said, he does identify some really good investments, but his legacy is his own catalyst. It is also difficult because during his early days, he participated in the markets during an overextended bull market.
I am not disagreeing that he now has a very large sway (which he earned himself) over the markets (in the short term). However, he wasn't born with this. He had to get there. How did he get there? By being really successful and being the CEO one of the largest companies in the world. How did he become really successful and the CEO of a really large company? He started with a really small money and compounded wealth at a faster rate than just about anyone over the course of 40+ years. One would have to reeeeally stretch the imagination and say this is based on some long bull market (65-82 were flat in the market...as was 1999 to today).
Soros doesn't come close, over the past decade he has been annualizing at about 10%. There is one manager that would eclipse WB in terms of long term track record- Jim Simons.
Simons/Ren Tech focus primarily on arbitrage strats as I understand it. Considering they only hire the brightest quants AFTER they proved they're the brightest (extensive research after earning Ph.D) its easy to see why. His firm charges insanse fees though. I think like 5/40 vs the average 2/20. Their returns precession was like 35% gross annualized.
http://www.marketfolly.com/2009/04/jim-simons-renaissance-technologies…
There closer to quality market makers than investors if you ask me. Not saying it doesn't take skills but different skillset.
Edit: I did a little more research & noticed they do hold longer positions but still not sure how long or their exact methods.
Simons was a stud, but is now retired. The sick returns that you are talking about belong to the Medallion fund, which is employee cash only unfortunately.
The truth of the matter is anyone who is aware of RenTech's strategy is yet to publically speak about it. While it is known that they trade in a high frequency capacity, they're not electronic market makers.
Can't people find someone new to circle jerk over.
Buffets good, duh. Read his letters, learn something. Otherwise, realize there are many strategies, best to learn how to dominate your strategy niche before its overcrowded, exactly how he still does it. Not too many people with his size of money to crowd his investments over his time horizon.
I don't care who has better percentage gains. He has the most money of any investor. Who cares if you are the best investor if you are worth far more than anyone else. I'm biased because I know him personally but still. Jim simons maybe gives him a run but after that there's just no one else.
What about Ray Dalio? I'm heavily biased here.
Fine, I'll bite. You know Buffet personally?
I'm not doubting Buffett's ability, but Jim Simons doesn't have that sweet insurance float either.
Soros & Simons. I think it would be more productive to break down rankings by strategy.
Back in my college days, it was reading Soros that turned my investing game around. Partly biased.
The whole 'knowing Warren personally' thing is epic
Regarding OP's 'not just leveraging beta' comment - not sure if the paper below has been posted before:
http://www.econ.yale.edu/~af227/pdf/Buffett's%20Alpha%20-%20Frazzini,%20Kabiller%20and%20Pedersen.pdf
Of course finding a lack of significance doesn't prove insignificance, and I haven't poked for the holes in the empirics, but it's an interesting analysis nonetheless.
What's for certain is he's a really sharp guy and any investor will learn many good things from his letters and approach to fundamental research.
And he seems nice too. I wish he was my great uncle or something. I imagine he would be really fun at Thanksgiving dinner (Tell us another story Uncle Warren!) esp after a few glasses of wine.
I'd have to say Simons out of the fact that he and most everyone at his firm is likely near genius level. I just personally admire people who has the brains to give fuck all because they could literally do anything.
And I'm sure Buffet is a cool guy, just get annoyed by his fan club. Everyone and anyone knows who Buffet is, Simons is less recognized.
Jim Simons, the hipster investor pick.
lol @ buffet having shit all over the floor of his car.
Benjamin Graham is the Godfather of value investing. Maintained 17% annual return until its termination.
Hard to put the label 'greatest investor ever' on any one guy. I like to think of them the way that I'd rank comedians. For every guy who's better or more popular than the guys before him, he'll tell you he couldn't have gotten there without 40 other comedians to piggyback off of and mold the ideas of. There's certain guys a ton of amazing comedians will have in common as influences and those are the ones who are widely regarded as the best... your George Carlins, Andy Kaufmans, Richard Pryors, Bill Hicks guys. It's impossible to put your finger on any one of those guys and just say "this one is the best" because they all have such distinct styles, but you can narrow the list down a bit. Other than the obvious guys like Graham, Buffet, Soros (I personally don't think he's a great investor), whoever... I think it's disappointing that so few younger investors know/appreciate the guys who were really big influencers but never super high-profile, e.g. Max Heine, Irving Kahn, Bill Ruane, Marty Whitman.
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