Baid: Top 10 investments drove bulk of Berkshire Hathaway's returns
Gautam Baid · The Joys of COMPOUNDING with Gautam Baid! · Feb 7, 2022 · at 42:06
Gautam Baid discusses how extreme power-law returns drive the long-term track records of elite investors.
0:00 / 0:20exact quote · 20.5s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“So Charlie Mangal has basically very famously said that if you take away the top 10 winners from all of Berkshire Hathaway's past investments, their overall career track record would become below average. So Even in Berkshire Hathaway's case, just 10 investments out of hundreds made over their lifetime accounted for the bulk of the wealth creation.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Gautam Baid
Gautam Baid: Stocks Hitting Highs in a Bear Market Lead the Next Bull Run
“New trends always emerge during the fag end of a bear market, and that is why investors should always be alert to which stocks and sectors are actually breaking out to all-time highs during a bear market, because the market itself will tell you where the next …”
Gautam Baid: A Bull Market Always Exists in Some Sector of the Indian Market
“A bull market is always going on at all points of time In some specific sectors of the Indian stock market”
Baid: Barely 1% of Indian listed companies are quality businesses
“In the Indian stock market out of the thousands of listed companies, barely one percent of them are actually quality businesses and they tend to enjoy what is known as a scarcity premium.”
Baid: Low-ROCE firms must fix returns; high-ROCE firms must scale growth
“In case of companies having low returns on capital employed, the maximum rate of change, the maximum delta, the maximum intrinsic value creation takes place when they focus on improving their return on capital employed. And in case of companies having high ret…”
Baid: Holding 25 to 30 stocks captures all diversification benefits
“The rationale for having 25 to 30 stocks holdings in each of these small cases is that this is the optimal number of holdings to maximize the risk return trade off. As per a study published in the international bestseller, a random walk down Wall Street, At 25…”