Surprise! Warren Buffett sets more reserves than politics

Recently reminded millions of people, Warren Buffett, CEO Berkshire HathawayHe doesn’t always call them correctly. Two years ago, Hillary Clinton predicted both presidential and winner, and he did not believe in this perspective until the election night.

Nevertheless, Buffettin has prepared in 1999 in 1999 today, and this is the most suitable time to look at the forecast of a stock market where it only reaches its terminal point. Here the Buffett was definitely on the right side of the bet.

Buffett’s forecast is due to the reconstruction of the reconstruction of the reconstructed dividends in the amount of the total return-fund assessment and 1999. Buffett initially made a speech in July of that year in an Allen & Co. Coure conference; repeated in several speeches in the next few months; worked with this writer to make the speeches into a Fortune Article, “Mr Buffett in the stock market” He ran on November 22, 1999. You will see that this is exactly 17 years later.

Why out of this Oddball 17 years? Buffett drew attention because in 1999, the US exchange ended in two wild and family-17 years, which Buffett could have a framework for a speech. In addition to a forecast for 17 years, which began as 1999, he would start the framework and asked for a closer prediction.

The 17-year period in the framework of the Buffett’s reference in 1964-1981, the exchange returned when the return of the stock market was traumatically bad. Dow The Jones Industry ended in 1964 in 874 and 1981 in 875. “Now I’m known as a long-term investor and a sick man,” said Buffett quoted, “he said Lucky Article, “But this is not my idea of ​​a big move.”

The aberrant was a sharp increase in interest rates during the filled explanation period for investment disaster: In 1964 in 1964, more than 4% in 1964 in 1964. FortuneIncreased interest rates cause to be dragged into capital prices. In this special 17-year period, the drag, the nation’s GDP is almost quintupling, an economic indicator, which is an economic indicator that is normally accompanied by roaring gains.

He then came from late 1981 after 1988 after the second 17 years. In those years, the Federal Reserve Chairman Paul Valkcer also attracted inflation rates. In response, the capital beed strongly. Thus, the corporate profit in time – “Standing,” he said.

Until then, ineffective, most investors do not think about foreign affairs. Instead, there was no doubt that there was the right to have the wealth of the wealth, both in accordance with and collected. In July 1999, when the other addition to the other 2000 points, the least experienced investors, the least experienced investors – annual returns of annual returns in the next 10 years were found to be invested in 22.6%. Those who have been investing for more than 20 years are expected to be 12.9%.

Well, Buffett, Buffett, which concluded his views in the second half of 1999, would not be a return of this great. Instead, it means that foresaw (without using these words), the progress of the world, which will be locked in the fate of normal suspects, interest rates and corporate profits.

And here he saw a result in the middle. Investors estimated that investors, which have a percentage of the return of these costs, the return of these expenditures, the late 1996, until the end of 2019, until 6%.

It’s been 17 years today, what is the answer?

First of all, as provided by the Exchange Exchange and Standard & Poor’s indices, for example, not engaged in “net” declarations. What you follow on your computer screens is common income before any trade and management costs are deducted.

However, the record shows that the total turn of the period is quite anemic to confirm the total accuracy of Buffett. In mid-November 1999, until the trade day last Friday, the owner of the Dow industry was 5.9% of the annual general income to investors.

The ability to manage the crystal ball work, 86-year-old refused to make a prediction to be careful when I started and ended in 2033 and ended.

Buffett, however, has provided three thinking about those who have been around for 17 years.

First, a investor in the low-precious S & P index of rediscovering all dividends will better complete a better investor than an investor who receives a 17-year government bond and all the coupons in the same instrument.

Second, the amateur, “do nothing” investors followed the same index fund strategy in the culmity Prefer the implementation of investors in investors who choose to fill out high fees.

Third, he will be very rich in the process of doing so many specialists who fail by managing their investors index funds.

Retired editor-in-chief-great Carol Loomis Warren Buffett is a long-term friend. There have been a shareholder of Berkshire Hathaway for many years.

This story was first displayed Fortune.com

Source link