Buffet is the GOAT, but do you think Peter Lynch would own the title right now if he’d have continued his career?

[ivi67]

Let’s try to compare the uncomparable. From what I found on the internet in the 13 years between 1977 and 1990, Peter Lynch multiplied wealth by 29 times, while Warren Buffett multiplied wealth by about 23 times. Peter Lynch did not have access to insurance float and he had restrictions wherein he could not have a highly concentrated portfolio. However, there’s of course no guarantee he’s excellent performance would have continued. I wonder if he’d have continued investing, we’d consider Peter Lynch a GOAT right now and Buffett would be a solid second?

 

[rrbb]

@ivi67 You can’t be a GOAT based on extrapolation. Buffet is the GOAT because he actually did it.

 

[amo2]

@rrbb I made 20% in a trade once, extrapolate that out a few years and I’m the GOAT by virtue of owning the entire universe.

 

[marjmorris]

@rrbb Exactly. There is a difference between knowing the path and walking the path!

 

[onestepcloser]

@rrbb Lebron is the GOAT? Nah I am the GOAT of basketball. I scored a free throw once in 5th grade gym class and then immediately stopped playing the game

 

[resjudicata]

@rrbb Jerry Rice for a career but I'll take prime Calvin Johnson this sunday.

 

[kenya123]

@ivi67 No. His fund got too big with the inflows and basically became a closet index. (He has even stated this) He got out when he did to keep his legacy going.

He simply couldn’t do in a mutual fund what Buffett did with his company. Too many restrictions on his trading and diversification rules that mutual funds have.

Magellan has basically tracked the total market since 1993.

Fidelity Magellan vs Total Market

 

[cpoland050914]

@kenya123 Yep. What’s so impressive with WB is doing it with massive sums. Making a billion hardly moves the needle for him now, which restricts his material investment opportunities massively. A fair # of people in the world can get a big return on low-billions of dollars. Gets a lot harder with hundreds of billions and when everyone in the market is watching your movements.

 

[danielmears]

@cpoland050914 That's exactly why Warren Buffet and Peter Lynch have both said/written that the average investor can beat them. The amount of money they both have to invest has the ability to significantly move the stock of small companies, so they're both forced to limit themselves to huge corporations. The average investor can buy the stocks that the two of them want to buy.

 

[vanessaeb]

@cpoland050914 This is true but also having this money opens up opportunities not available to the average Joe, like during 2008 crisis.

 

[jamesprayer]

@kenya123 That's pretty much what eventually happened with BRK too. It is such a large part of the market it basically acts like the market.

 

[jj6211]

@ivi67 Jim Simmons and medallion fund did it better if you measure it like that

 

[jmb1990]

@jj6211 Also check out Bill Miller at T Rowe Price.

 

[kidkaos2]

@jj6211 Oh, those guys are definitely goated. It’s basically a free money hack

 

[alwayshavealwayswill]

@jj6211 *John Simon, not Jim Simmons

But agree - he's got the best investing track record of all time and is probably the only example (besides Lynch) as the only investor to consistent beat the market (after fees and taxes) year-in and year-out

 

[aubie2]

@ivi67 If Buffett retired at 65 he wouldn’t be the legend he is today. Those extra 30 years of compounding returns while SPY was flying really helped.

He is a great investor but not the GOAT imo.

Stanley Druckenmiller for example was better.

“Druckenmiller has never recorded a down year (his fund even notched a return of +11% in 2008). During one stretch, he compounded assets at 30%+ a year for 30 straight years.”

 

[matrix80]

@aubie2 Interesting thing about BRK is that it's returned ~10%/year for the last 20 years. All of the outperformance occurred before then. It's still an amazing feat considering the longevity of the (prior) outperformance and how big the asset base has been - Buffett is one of the few true investment geniuses out there. I'm just saying that the outperformance bloom has been off the rose - which Buffett warned people about for decades prior - for two decades now.

 

[aubie2]

@matrix80 Some of that is his fault - ignoring Apple, Google, MSFT, Amazon etc

Some is because his fund got so big it’s hard to move the needed with smaller growth stocks.

 

[godisatulpa]

@matrix80

it's returned ~10%/year for the last 20 years. All of the outperformance occurred before then.

the late Charles De Vaulx said on a podcast how Buffett was still beating the market pretty regularly, if you adjusted for the large cash holdings. https://www.morningstar.com/retirement/charles-de-vaulx-why-value-investing-has-slumped-will-rebound

 

[msjosie]

@godisatulpa You also have to adjust for the tax drag on dividends paid on the index, which also helps Berkshire's performance relative to the market.