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Why is it Getting Harder for Guys Like Warren Buffet These Days?
Why size matters
No, it’s not about his age.
Lots of money.
Tons of it.
If Buffet started over today, he would probably make a ton of money.
Buffet has too much money today. That’s his primary issue.
He’s gotten way too successful at what he does. So successful, in fact, that he can completely purchase anything he wants — then he could buy even more.
According to 13F filings, Berkshire has about $208 billion in equities in the stock market. Buffet also carries over $100 billion in cash currently.
You can’t make the same amount of money with over $300 billion that you could with $1 billion. You couldn’t move $300 billion the way you could $1 billion.
If you want proof, look no further than Renaissance’s Medallion Fund. The fund is limited to $10 billion each year and it has annualized approximately 70% in returns for the last 30 years.
These numbers have killed Buffet’s track record. However, if you look at Renaissance’s larger portfolios, you’ll find similar results to Berkshire’s.
This is because the larger the size of the portfolio, the exponentially harder it gets to…
