The Slight Edge is an amazing book about an amazing concept. Dramatic change happens one percent at a time at a consistent cadence.
Also great chapter in The Psychology of Money about Warren Buffet. He's been investing since he was a child and is now in his 90s -- He's been compounding returns on a longer timeframe then anyone else alive.
That is selection bias at its worst: he really is an outlier. There are plenty of investors that beaver away every day and do not get his returns. I suspect you could pick one of his decades and only find a few people that exceed his ability.
> And he also hasn't beaten the market in over a decade.
You say that like it's an accurate condemnation of Buffett's investment skill.
A 30% - or higher - average annual return like the old days means Berkshire would have to go from a $636 billion market cap to a $8.7 trillion market cap in one decade. Yeah right.
Berkshire no longer competes with the market. It is the market. The larger you get, the harder it is to keep high returns going; Berkshire got really, really large. In terms of value it's also overwhelmingly an operating holding company, not an investment portfolio. The investment side of the business is not what drives Berkshire's stock higher, and hasn't been the primary driver for decades, operating results are.
Also great chapter in The Psychology of Money about Warren Buffet. He's been investing since he was a child and is now in his 90s -- He's been compounding returns on a longer timeframe then anyone else alive.