From: Robin Hanson (rhanson@gmu.edu)
Date: Mon Jun 16 2003 - 11:40:42 MDT
On 6/16/2003, Ron h. wrote:
>>Maybe Buffet is in fact much more rational than the average trader.
>>And there are people who win at poker too. But what makes you think
>>you are another Buffet?
>
> In addition I have read Mr. Buffet, and observed my grandfather as
>well as an old buddy playing business for money. ... It seems his talent
>is finding really good profitable businesses that emotional people are
>willing to sell too cheaply on some given day.
> To me the illuminating question is this: if I do a Buffet type
>investigation of a business and its market and end up buy a stock paying
>$15 annual dividends like clockwork for $100 per share (that is his criteria
>for performance) and that stock goes to $50 per share if I do analysis of
>the stock only to discover nothing material has changed should I sell?
You have a much more basic question to address: what makes you think you
can do anything like a "Buffet type investigation"? I'm quite sure that
he has not completely revealed his investigation strategy. Look at the
vast numbers of traders who try to copy Buffet and fail. How do you know
you will succeed where they have failed?
Robin Hanson rhanson@gmu.edu http://hanson.gmu.edu
Assistant Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326 FAX: 703-993-2323
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