On Apr 12, 2008, at 11:05 AM, Shane Mage wrote:
> Warren Buffet has done nearly as well--and over a longer period--with
> absolutely *no* speculation.
My definition of speculation is buying securities with the hope of selling them later at a higher price (or shorting them with the hope of buying them back at a lower price, but let's bracket that for now). That's exactly what Buffett does. He buys stocks he thinks are "undervalued" through systematic market misperceptions - often in private placements on favorable terms to himself - and waits for them to rise. They usually do. He's clearly very talented at what he does, but it is speculation. It's on a longer timescale that what Soros does, but Soros also looks to take advantage of what he sees as systematic mispricing.
Doug