Why You’re Not One of the World’s Great Investors
And that’s fine. You don’t have to be perfect to do perfectly well in the stock market.
Bloomberg, April 24, 2020
How would you like to generate 40% annual returns for three decades? Build a firm with billions of dollars under management that’s the envy of the industry? Become so influential that your peers — assuming you have any — are so in awe of you they are afraid to discuss you with the media?
Sounds great, right?
Well, forget about it. Jim Simons, the quant whiz who built teams of computer science wizards and math geniuses into Renaissance Technologies, is a once-in-a-lifetime talent. We learned from journalist Gregory Zuckerman that Simons’s fund returned an insane 40% annually. This year, according to Zuckerman, the firm’s flagship Medallion fund is up 24% after costs. Before fees, in the midst of the conoravirus crisis, the fund gained 39%.
You are not Jim Simons…
But here is the thing: You don’t need to be. At least, you don’t need to be any of these people in order to achieve the investment returns that will ensure a comfortable retirement. Your temperament is different from that of Munger or Simons or Buffett or Marks or whomever. We look at these fantastic wealth-creating trades and waste our time wondering, Why not me? Instead, find an investment style that suits your personality, available time and interests as opposed to trying to match those with whom you have nothing in common . . .
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I originally published this at Bloomberg, April 24, 2020. All of my Bloomberg columns can be found here and here.
