> it makes no sense to judge his long-term results based on a short stretch of under-performance.
It makes enormous sense: He missed the biggest economic event of three generations. If you can't call the big ones, then there's very little proof his returns were something other than luck.
Look, both Keynes and Buffett (since you mentioned him) have long term positive results when there was a long term positive market. Choose a high-beta portfolio in such an environment, and voila! you beat the market. In order to show you have any actual insight and aren't just playing for luck, you need to show that you beat the market significantly in both up and down environments.
BTW, the entire mutual fund market is based on this approach, and when a fund seriously underperforms, it is conveniently removed from the portfolio of Fidelity/Janus/insert hucksters here.
It makes enormous sense: He missed the biggest economic event of three generations. If you can't call the big ones, then there's very little proof his returns were something other than luck.
Look, both Keynes and Buffett (since you mentioned him) have long term positive results when there was a long term positive market. Choose a high-beta portfolio in such an environment, and voila! you beat the market. In order to show you have any actual insight and aren't just playing for luck, you need to show that you beat the market significantly in both up and down environments.
BTW, the entire mutual fund market is based on this approach, and when a fund seriously underperforms, it is conveniently removed from the portfolio of Fidelity/Janus/insert hucksters here.
Edit: Relevant http://www.marketwatch.com/story/americans-dont-understand-i...
Most people out there don't understand the inverse relationship of bond prices and yields, let alone beta.