Some investors whom we call “legendary” have barely, if at all, beaten an index fund over their careers. On Wall Street, big wealth isn’t indicative of big returns.
How well do you understand one billion?
If you had one billion dollars and you spent $1,000 each day ($1,000 is a figure that most people understand), how many years would it take you to go through the billion?
The answer: a little over 2,700 years!
Three of the funds that they run, lost hundreds of millions of dollars since the beginning of this year. Expressed as percentages, the figures are 50%, 63% and 84% respectively.
During that time, the market dropped 20%. Losing more than twice as much, more than three times as much and more than four times as much as the market, takes special talent.
My 8-year old grandson could learn how to equal the market. (Buy and hold an exchange-traded fund which tracks S&P 500. SPY is a good example.)
Chase Coleman and Chamath Palihapitiya remain billionaires. Their clients lost the money, not them. In fact, they got paid for running these funds. Smart guys, alright.
How much education, training, access to tools and to company executives do Coleman and Palihapitiya have? More than my grandson or you and me.
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