Warren Buffett: Ignore Your Financial Advisor
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- Опубликовано: 10 дек 2023
- Financial advisors and hedge fund managers are the worst people to trust with your finances and stock market investments, according to Warren Buffett. In this video, Warren Buffett explains why financial advisors are bad investors and why you should totally ignore them...
Love these two guys. R.I.P., Charlie. 😔
I paid a manager at Morgan Stanley 1% thinking that he was incentivized to do well because the bigger my account grow the more he made and he did nothing. I could’ve tripled his performance by simply putting it into QQQ.
Nobody but Nobody Takes Care of You Like Yourself......
If you would have 20 million in your account he would probably do smth.
Did you tell him you wanted to be weighted towards more large cap tech exposure? That’s essentially the only reason the qs have done so well. I’m sure if they knew your risk tolerance and preferences, they would’ve better positioned you, but probably resorted to conservative investments to guarantee their management fees continue.
Advisors are like a casino. The house always wins regardless of what you win or lose.
"We were getting a lot of credit for being smarter than we were" Charlie keeping it real till the end.
I do not follow Charlie's and Warren's advice...
@@janpierzchala2004 Okay
Large percentage of advisors only care about one thing , get as much money from the people. If you don’t know anything just buy the S&P500 total index fund
The problem with information about stocks is that when the individual gets this information, Wall Street already has it, and the damage is done. The individual investor is at a great disadvantage against Wall Street.
I have called investor relations several times regarding investing in a company, and they usually couldn't be bothered. But fund managers get their attention.
So you were okay in 2008 when the S&P 500 fell 48% or in 2020 when it fell by over 30%?
@@es330td Yes in 2008 I was buying nvidia, Microsoft, Altria , Kroger.
@es330td in 2020, I bought two oil stocks in a fire sale. I have made tons
on both. I am positioned to pick up bargains next year if there is a recession and the market tanks. I do what most wealthy people do, and that is buy when everyone is selling. I am not wealthy, but am working on it.
@@HughButler-lb6zs
💯
I bought Berkshire Hathaway for $21,542 on January 23 of 2018. It's now $37,846 up 76% but the S&P has gone up about 72% in that same time without considering it's dividend minus expense ratio. With a 1.3% average yield the same dates the S&P is up 82% in six years. The index QQQ is up 153% while paying some dividends. BH has never paid any dividends. Going back to 1965 BH has outperformed the S&P by a bit more than double but the stock market in earlier years was about paying dividends not focused on increasing the stock price, so moving forward it's worth playing with the numbers Warren's suggestion to buy index funds with the lowest expense ratios you can find seems like very solid advice.
That is all 'summertime' data. If you expand out or even dial into just difficulty years QQQ is a horrible risk. Sure, risk is great when its great, but it doesn't have staying power and you will lose it all faster than you gained it. As you mentioned the current market philosophy is all about price which is manipulated with buybacks and other shenanigans. Once that stops or things get bad again the low side is greater than the highside when things are good now.
Having triple digit potential returns means nothing if you can't realize them when your horizon goes from being far off to right now.
It's about time horizon for sure, but it is a different stock market today then when he started and he keeps saying they have so much money now it's much more difficult to identify a large cap company they would want to buy, compared to the small companies they bought when they were small. He is concerned about the commercial real estate market, inflation, and the overprinting of money. His recommendation remains the S&P if it grows huge in your lifetime then you can manage the downturns and siphon off the gains because it's just so large. Vanguard warns me we might have a 70% market drop they manage my account with index funds but have started to use managed funds in the retirement accounts. The world is a very troubled place hard to understand why the markets are so high but they printed a lot of money and most of that has probably left the pockets of the spenders and gone back to the the savers.
The one thing I do agree with Warren Buffet on is that retail investors should invest in index funds. Wall Street has information that retail investors do not have. So they make informed decisions faster than a retail investor can. By investing in index funds you are investing in a U.S. economy which is a money making machine ( most of the time)
The necessity to make fast decisions is removed if you have a long term investment horizon.
Then the question becomes whether you can make good returns that way. I’ll say yes, definitely.
Look at any pension fund that went to Wall Street and got destroyed. These investment firms lie, cheat and steal all legally through their calculations of average earnings, fees and intentionally selling you product that they have shorted.
80% of all mutual funds under perform thier respective benchmarks is not a marching order. Meaning 20% outperform and no, its not a random crap shoot.. with a little homework staying in Alpha is not that hard. If you simply want to mimic the markets that's fine but a victim mentality is not necessary.
@@brianhearden459 This is something Dave Ramsey says a lot too, but the number of funds that actually fit this description consistently over the years are actually very low. Why don’t you provide an example of the ticker symbol for 4 of the funds you use that have beaten the benchmark for the last 10 years.
@@brianhearden459 risk aversion has a price. You didn't say how much they underperformed. 1%, 10% 50% or 109%. I think that is important.
These guys are awesome but they remind me of those sarcastic old muppet guys and now I can’t unsee it.
I’ve found investing in individual stocks or funds myself is a mugs game, a bit like playing a slots machine. People like Warren and Charlie are experts, their knowledge and experience is priceless, for the rest of us I know now our best chance of long term success are Global low cost index funds.
The biggest problem is that you paid them up front, if you hire anyone at any profession if you pay before they get the job done they may not even start the job. To pay 1% should be paid only if they make you money. But the system sucks even 401k keep keep offering their services, and they can make the decisions for you, for 1%, and still there is no warranty.
There are funds with no management fees and only performance fees
I substitute the word “stocks” with the word “companies”. And over the years I find these companies are often found in the top ten holdings of certain index funds over long periods of time. Index funds are great investment vehicles as well as excellent barometers of thriving companies.
People think paying for a 'wealth manager' makes sense and should deliver good results. After all, they are highly qualified and well-paid professionals. Unfortunately, the wealth/fund management industry is about the only one where the old adage 'you pay for what you get' doesn't hold! The whole model is built around collecting assets under management and charging fees that may seem low (1% per annum) but act as a massive drag on performance over the long-term. People just don't get how accumulated fees compound - if they did, they would likely be horrified and just invest in low cost trackers.
Passive index investing isn’t for everyone’s income/cash flow requirements, risk tolerance, investment goals. And it comes with costs as well, like the expense ratio of an ETF. Some people need to diversify, or hedge, or need cash flow/income from their portfolio. Some people need more or less liquidity, or want different exposure. Some people haven’t a clue how to optimize their investments for taxes. Wealth managers can be valuable for those who don’t have the time, money, and/or knowledge to properly manage their investments according to their own preferences and needs.
Investing in ETF’s is the way to go for most people’s best interests. The knowledge, information and time needed to invest in individual stocks is more than most people can handle.
Rip Munger
Sees candy is a bad business in a world where sugar is losing popularity. Lots of Berkshire Hathaway companies reflect the whims and interests of the founders. Which goes to show you can make a lot of money focusing on your own interests.
Buffett and Munger were/are amazing. You can tell by how many RUclips channels leech off them
Greedy, selfish, repulsively evil people who never lifted a finger to help anyone, despite all their riches and money.
Yeah, such "amazing" people.
What shareholder meeting is this?
Nobody should know what you want better than you. So don’t pay them for it. Take ownership.
Most are not willing to invest the time to learn how each assest class works and what makes the prices goes up and down. Most can't even make up the relation between macro & micro economics to the price fluctuations.
Warren always pulling Charlie's legs. Really dominating of the two
I’ve heard that, in buy/hold, only 1 portfolio in 10 can beat the S&P; it’s just the statistics not a criticism of anyone .. think about the target to be beat - the value of the 500 BEST (not average, best) companies in the US weighted by their market cap .. I think the only opportunity to do better is to actively manage the portfolio (like BRK does)
The opportunity to do better is to understand macroeconomic conditions and rotate asset’s accordingly
Invest in index funds says the active fund managers.
Berkshire is not very active. They basically buy and hold.
They’re active by standard definition. They’re not a traditional stock fund, however. In any case they’ve not done that impressively themselves over the last 5 years.
@@a.s.2426 And the last 5 years is peanuts compared to their years in the game.
@@ManPursueExcellence For sure. But Buffett has all but said that an S&P 500 index fund will likely outperform Berkshire for the foreseeable future because of Berkshire's size and other factors.
@@a.s.2426 I agree.
on one side - draw up some company health/performance ratios (like ROI) on the other valuation metrics (like PE or P/FCF); see the best of both & invest in a basket of 15-20 stocks across 5-6 industries; its a very layman like approach & generally will give you much better than S&P returns
Are you kiddin' me..?! They tripled my money from 2009!
The S&P was about $80 now it's $485 or times 6.
So funny didn't know today was Holi day for shiva and kept talking about him in the last couple of days ❤❤❤
You have realize where your talents are in life. ETF,s are the way to go for most people for the long haul.
Correct. OR i would gladly pay 1% for investor firm if they can outperform index and compensate for their cost and more
Coca Cola just happens to be their favourite drink.
Yes and they both always eat Sears candy all day long. Even when the camera isn't rolling.
A pension that can cover all your expenses during down markets let's you avoid withdrawal risk and be more aggressive.
Isn't Wells and Fargo a terrible bank though?
I love his disdain for Wall Street.
Somebody should have invested in a better camera.
The problem i have with etfs are they are priced like a stock, so lets say i buy several @400.00 ea. But i want to keep putting say $600/mo. Into it for retiring, i have to wait until i have enough money to buy another one. Then as the price goes up, i have to wait longer and longer until i have the money to buy another share. All that downtime, my money is not being put to work. I want weekly contributions and etfs wont allow that
can't you do fractional shares?
So what do we do?
Index funds ?
Low cost index funds is what he recommends
To be fair though, what you’re paying for is an ear to bounce your ideas off of and someone to help you not sell when the market is at its lowest. Not to mention estate planning, tax, education funding etc.
When you pay a % of your portfolio as fees, you essentially are paying mg far more by way off fees than what you save through tax planning.
They never want you to sell ...LOL
Hold the S&P ETF and day trade with margin to capture alpha on top. Still, most of your gains will come from the S&P in the long-term.
I don't want to be disrespectful, but using margin is suicidal. The deal is when the underlying securities do not have enough market value to serve as collateral for the loan, the lenders have the right to sell that security. It will be done at the worst time possible. I am speaking ftom experience.
Am I over simplifying it? Isn’t investing in individual stocks as easy as going out to eat or buying an expensive luxury item?
Look for value, a proven winner over time. Buy what you like or what the majority of other people like.
Rather than always spending money at the places you do business, buy the stock? Especially if it pays a dividend.
I saw another video where Buffet said buy stocks and never sell. I understood that to mean, buy and live off of the dividends, if you can’t reinvest the dividends.
Everyone likes computers and video games. NVDA NVIDIA makes high end graphics cards for gamers.
Another example is CMG Chipotle stock has had incredible growth.
I’ve been watching BRK-A Berkshire Hathaway Inc. for over a decade. It was up $6,000 today.
Does anyone invest in individual stocks or is everyone in mutual funds?
Individual stocks are always better but u need to do the legwork of knowing the companies. Seeing their worth. Then u can outperform the index which holds many companies
Yeah, what he said.
Here is some practical advise: if you do business with any Buffett company review your cost. I recently switched from Geico and saved 60%. Buffett has been getting a free ride from the media and has no qualms of jacking up prices. Greedy old man.
regardless you still pay fees win or lose with no protection however for me there was a safe haven in the plans they provided for my company I am forever great ful thank you.
So what is the alternative for people that do not have the knowledge?
Index funds ?
ETFs
DCA into low expense and well-diversified index funds or ETFs. checking their composition s very easy. Morninstar website or stock analysis and so on
Vanguard S&P index fund
He's right: it's a total rip off!
Finanicial advisers exist to help people manage risk and achieve goals who are unable to or do not have the expertise to do so themselves. To suggest that they should be ignored is poor advice. I take advice from my mechanic, my electrician, my builder, my doctor because they are experts at what they do. Find a good one and it will make a difference. Just don't find one in youtube comments!
I totally agree with Warren, and I am speaking from, experience. I now take the time to educate myself and do all my investing myself.
Isn’t BH a fund manager?
No.
Buffet sells 28 billion dollars worth of stocks
BH is worth $991.8B. It's a portfolio adjustment.
Our economy struggling with uncertainties, housing issues, foreclosures, global fluctuations, and pandemic aftermath, causing instability. Rising inflation, sluggish growth, and trade disruptions need urgent attention from all sectors to restore stability and stimulate growth.
Things are strange right now. The US dollar is becoming less valuable because of inflation, and other powerful nations waking up to trade in their own currencies. Good thing is, a lot of people still turn to the Dollar because of the safety is somehow assures. I'm worried about my retirement savings of about $420,000 losing value because of these factors and more. Where else can we keep our money?
Thomas Malthus : The law of diminishing returns.
Buffett came from wealth in an era of massive economic growth. They are rich people who got richer.
The Old Guyson the Balcony, from The Muppet Show
To going ok ok
Charlie was hilarious is this presentation.
Bad not will street ok
OPM
Tautology: you have a number of people trying to do better than average and a very few with huge returns. Of course the average investor will do worst tha the average returns. It is the same with income: get a group of people, then the average income is 50k, maybe 200k... then if you have Bill Gates in the group, the average will be hundreda of millions and 99% of people will be doing worst than average. because of the outliers. Investing is not the same as delivering babies or getting haircuts...
as a vhnwi, i laugh at fin advisors.
PLEASE SELL. Wells Fargo. They have been an atrocious bank for decades.
Yup. These advisors from brokerage firms tend to make you broke. Lol
YOLO!!! Dogecoin!!!
puta madre 12 mil anuncios.....
I would push back on this a bit. The S&P500 does outperform most investment managers IN THE LONG TERM. But people do have different investment objectives, different time horizons, and different acceptable levels of risk. And yes the S&P500 has historically outperformed other investment managers, but that is no guarantee that it will continue to do so. Also, during all of those years of returns, there were many times where the index swung high and low. If someone is only looking to invest for 5 years, an they just assume the S&P won't do them wrong, but right at the time they need the money, the market takes a dive, well then the S&P actually was not a suitable investment, and right when they were expecting gains, they incur losses. So any video that claims any one investment is the end-all be-all solution, always be wary. Everyones situation is different. We all wanna make money, but not everyone can handle the volatility of the stock market, an not everyone is investing with a 20+ year time horizon.
5 years isn’t investing, it’s speculating - Ben Graham
The short answer is Buffet didn't become wealthy with index funds..
@@brianhearden459 I don’t think u know what buffet has had to say about index funds - u should read and Google my friend - In 2007, Buffett bet a million dollars that over the course of a decade, a simple S&P 500 index fund would outperform a basket of hand-picked hedge funds. He picked the Vanguard 500 Index Fund Admiral Shares (VFIAX).
Hedge fund manager Ted Seides from Protégé
Partners accepted the bet and picked five funds-of-funds. A fund-of-funds is a portfolio of funds that charges two layers of management fees.
The outcome? Buffett triumphed decisively.
Of course you, a random internet person, knows better than Buffet and Munger. You can't make this shit up.
@@brianhearden459 Sure. But he was afforded chances most people cannot get. Nothing wrong with index funds. Define wealth. Studies shows most people are content with retiring comfortable, ie. not having to worry about bills and shit and can still live their daily life. With the way it's going, most people won't be able to retire.
Buffett getting up there, better hire a CFA now so he has some left money to retire on!😮
Old video
You can't take it with you 😂
Worst Bear Market since 1929 !!
But when the Munger left the building and went to eternity or hell he didn't take a single cent with him. He just couldn't. So what's the point. The life has been lived very quickly compared to eternity. So shouldn't we focus more on how to access the eternity not the money ?
The answer is maybe. I don't believe in eternity. When you die , it's over. There is no afterlife. Since I believe you have one. Life, you should make the most of it, and do what makes you happy. If making money makes you happy, go for it. But if eternity makes you happy do that also. If you are wrong about eternity, you really don't lose anything.
@HughButler-lb6zs If you believe in eternity (ie Jesus Christ) it won't take away your happy life. This is a common misconception. It's actually quite the opposite. I chose faith because of the better odds: better life quality and a chance for eternity.
So invest in healthcare stocks.
You don't know what happens to a person after they die. You only know what you have been told. I think the smarter play is to make the best of the life you have while you are alive and do what makes you happy.
Wolf of wall st is all the information you need about wall Street
Buy GOLD. I remember in the 70's it was 255.00 per oz. Had a friend who was jewler.
Gold is only up $525% in 20 years. The Nasdaq is up 1600%.
That comes with great risk@@Tysto
Doesn't matter how anyone invests, houses just got much more expensive than what you made. Sure, you can take on even more risk than 100% stocks, but then you also stand the chance of losing it all.
Aren't these the old guys from the Muppets
No ... these old guys own the Muppets
Just think about what these two guys have done in the investment world. They built a $750 billion dollar company from nothing. And all their earnings were from the losses of all the other so called investors. Basically how Wall Street works is, if an investor makes 100 million. Somebody else lost that 100 million
Zero sum it is not. You invest in growth markets. Where the "100 million" of value did not exist previously.
You should find something else to invest in. Not stocks.
@@markw999I agree in so far as investing in yourself, expanding your knowledge, skills and education is the best investment every person should make. Wealth will then follow naturally.
Ya.. they lost it in index funds that Buffet NEVER invests in unless he is flat out of good ideas.. 👍
Not necessarily “lost” $100M, but definitely “spent” $100M .. for example, BRK buys an electric utility company for $120M and we say that last year that company sold electricity to customers for $500M, spent $420M after tax to generate, supply and service that electricity to those customers, leaving $80M for BRK - along comes another investor who is now willing to to pay BRK $140M for the company under the belief that the company will do that again for the next two years with potential profit of $20M ($160 -$140) - leaving BRK with a years profit $80M from the company + $20M profit from the sale .. BRK “gains” $100M, others have “spent”, but nobody has “lost”
4F meet goodmorming ok trump not out ok
the amount of stupid people who think the market is a casino is both mindboggling and pleasing.
Charlie looks embalmed.
Hey dummy Charlie just died.
I like to no how they skim money out of your account without you knowing
They don't skim money. They issue a prospectus that explains what you pay. Have you ever read one?
@@HughButler-lb6zs no, do they mail this to you, thanks for reply
Kinda the same thing
@@lisagayhart2482 so you expect them to work for free?
Has Buffett out performed the S&P500 in the last 5 yrs, no, last 10 yrs, no, last 15 yrs, no. So why would you pay Buffett to run money. He has too much to say IMO and doesn't provide value. Sure he did great from 1958 but we are not investing in 1958, we are investing today.
Beating the S&P has become more difficult as BH became much larger.
Just buy bitcoin and avoid all the headaches and actually outperform every other asset by a mile
Just go gambling….
Someone owns a lot of bitcoin 🙂