Conventional wisdom (which I believe) is that long term individual investors do not beat the market. However, from my mostly-uniformed view, Buffett did exactly that. What was his "secret"? Did he build most of his wealth outside the market?
Charlie Munger used to talk about how easy it used to be because there was so much less competition and the competition wasn't that smart. Think by the 70's once they figured out how to accurately price options with the Black-Scholes model things started to ramp up. By that point, Buffett was already a player and had the funds to make moves.
Interesting. I've never heard of that model. So what Munger is implying is that by the 80s even Buffett wasn't beating the market but was leveraging his money for gains. Thanks!
Sorry I didn’t mean Buffett and munger used the option pricing, I mean regular people did. They also got more money by buying up insurance companies and investing the float
