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Comment by bdangubic | Hacker News Reader

name one rich person who is “diversified”?! take top 1000 richest people on the planet and find one that got there buying index funds… I’ll wait

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I have a buddy that's a wealth advisor with a high net worth (100M+) wealth management firm. Wealth preservation -- and really diversification -- is all ultra-high net worth folks care about. They buy lots of index funds.

I'm not sure if this is some prosperity gospel silly-ness, but I think folks reading this deserve a disclaimer: Buffett's college mentor was Benjamin Graham -- the father of value investing, Gates mom was friends with Buffett and set up Bill's first contract with IBM, Zuckerburg's parents offered each of their children the opportunity to go to Harvard or open a McDonald's franchise. Six of the top 1000 richest people have the last name Walton. Failure -- as most of the world know's it -- never exists for most folks in the Forbes list. They were always going to be very very comfortable. Putting too much stock in their success is like watching Skii-Ball at Chuckie Cheese to learn bowling.

$100M is not ultra high net worth. and also absolutely no one here is talking about “wealth preservation.” what I was saying is that none of even those “ultra high” earners made their money diversifying.

once you are super rich surely you’ll set some money aside to make sure you stick around in high society. but no one - not a single soul has ever gotten rich that way.

I have no idea what your 2nd paragraph is for…?

UHNW is $30 million or higher, so yes, $100M is very much in that bracket

The top 1000 richest people are probably not good examples for the rest of us. They're extreme outliers. Much like professional athletes few make it to the top 1000. The average Joe is not going to make it.

There will only ever be thousand people in the top 1000 richest people. There is no guide that can help you become one, you will have to displace one of them to get that title and you cannot displace them by copying them by the way so the argument that the advice doesn't match their behaviour is kind of useless because you want unique circumstances that nobody else had before you.

they are an equivalent of Michael Phelps. I like to swim, but I probably in all honesty could not really keep up with him. In fact, I would probably just die if I did.

this isn’t a competition though? you can learn to swim too…

This is hilarious. You're wrong for like every reason, but I'll give you 3:

1. Berkshire has not significantly outperformed the S&P500 for 20 years. Go take a look, they've basically converged. Markets become more competitive over time. People lose their edge.

2. Investment returns in excess of diversified market returns (which represent underlying growth across the entire economy) ARE zero sum. If you get them, Berkshire does not and quant firms do not and hedge funds do not. If you can beat these guys, don't use your money. Go get a job doing this.

3. Watching Michael Phelps swim is a terrible way to learn to swim. Anatomically he's totally aberrant, but he's also optimizing for fractions of a second racing across an indoor olympic pool. That's all inapplicable to basically everyone swimming anywhere.

You're choosing not to hear what folks are saying and I wish you luck. Your hubris will be rewarded justly by markets, but perhaps only after a few confidence building wins that convince you random jitters of a trend line are really signs of your hidden brilliance yet to be recognized.

Berkshire doesn't have a chance to outperform because it's too big. It can do a little bit better (either in EV or in some risk adjusted EV measure) but it's able to capitalize on opportunities smaller traders have.

Yes, it's better to take advise from someone who's doing a little bit better than you.

Warren Buffet is pretty diversified, owning stakes across many different sectors. He’s also advocated investing in index funds with the old ‘time in market’ line

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