Posts by Wesley R. Gray, Ph.D.

Mission Impossible: Beating the Market Forever

November 18, 2014

A quick glance at the most recent Berkshire Hathaway annual report (PDF) highlights an amazing data point: Warren Buffett has compounded at 19.7% a year from 1965 through 2013; the S&P 500 Total Return Index has compounded at 9.8% a year from 1965 through 2013. The immediate reaction to these figures is predictable: “Warren Buffett is an investing god, so we should buy Berkshire Hathaway and throw away the keys.” The gut reaction is that Buffett can continue to beat the market forever. Unfortunately, as this post highlights, this is an impossible feat.

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Does Doubling Down Work?

November 17, 2014

Doubling Down Jonathan Rhinesmith A version of the paper can be found here. Want a summary of academic papers with alpha?

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