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abirchyesterday at 10:56 PM2 repliesview on HN

Buffett's Alpha: http://docs.lhpedersen.com/BuffettsAlpha.pdf

tldr; he was leveraged with good stocks


Replies

lifeisstillgoodtoday at 2:19 AM

“””Whether it’s socks or stocks, I like buying quality merchandise when it is marked down”””. Buffet, BH annual report 2008

agobineautoday at 8:04 AM

this is a very interesting read, thank you for posting

you may consider a simple example for yourself:

Portfolio $100,000.00 $60k into US Tbills, (3, 5, 10y) $40k into SP500 cash $40k into Sp500 on margin

$140k exposure For the portfolio to be wiped out, you would need to have a 50% drawdown in the sp500 which hasn't happened in 90 years, and that assumes in a crash your tbill face value wont soar due to rate cuts