I guess Mr. Zweig, who has written some biographies and updates of Buffett's inspiration Benjamin Graham (#851506), has the right to voice his opinion.
"There’s only one Warren Buffett, and there will never be another."
when markets are young, underdeveloped, illiquid, or lacking in information (#971152) — see Predyx arbitrage... #946762 — there are superior returns to be harvested. When those gaps close, and us other suckers pile into said game, the incredible winners of ages past will stop winning and new ones won't reap the same rewards. I will never be as good as Undisc in betting on Predyx; the next generation will have a worse bitcoin deal before them.
Buffett is not only brilliant, but he has also spent nearly his entire long lifetime obsessed with the stock market. Especially in his early years as an investor, his unparalleled success depended on an unbearable sacrifice: forgoing a normal social and family life. As a young investment manager, Buffett would wander through his house with his nose in a corporate annual report, practically bumping into the furniture, oblivious to the comings and goings of family and friends. While his kids played at an amusement park, he would sit on a bench and read financial statements. Buffett was there physically, but mentally and emotionally he was off in a world of his own, fixated on tax-loss carryforwards and amortization schedules.
This is nice, but unclear that "investing" or "studying stock market" is a thing that generates superior returns (#974166)
"Now that AI is universally available, a person with Buffett’s massive command of data won’t even have an advantage in the future."
Then there’s the period—the time over which Buffett has exercised his investing prowess. As he has said many times, he won “the ovarian lottery” by being born when and where he was. Had Buffett been born in Omaha in (say) 1880 instead of 1930, he would have had to invest in livestock instead of stocks. Had he been born in 1930 in Omsk instead of Omaha, he wouldn’t have owned railways; he probably would have worked on the Trans-Siberian Railway.
The following two aspects, though, I've always found to be the most important ones in explaining Buffett's track record:
Buffett also began his career before trillions of dollars had poured into the stock market from index funds and other giant institutional investors. He built his phenomenal early track record by fishing where no one else was even looking to catch anything. He fed on the tiniest plankton of the stock market.
AND this:
Berkshire isn’t a hedge fund, mutual fund, exchange-traded fund or any other conventional investment vehicle. By design, it charges no management fees that would subtract from its returns and no performance-incentive fees that would encourage excessive risk-taking in pursuit of a big payday.
That liquidity and internal control (in contrast to the "procyclicality" of other successful funds) carry some more explanatory power:
Berkshire’s only cash flows, however, are internal. Money comes in from (or goes out to) the assets it owns. Cash can’t come pouring in from new investors, or get yanked out by fleeing investors, at the worst possible times—because you can invest in Berkshire only by buying shares from someone else in the secondary market.
Maybe minus the Norwegian oil fund, but who's counting... (#899606)
non-paywalled here: https://archive.md/piPqo