David T. Durant 2015 Etrade Investing Results
2015 was a very tough year in the stock market. The S&P500 ended down 0.73% vs. the historical average of ~10% increase each year. That is like expecting a Christmas bonus, but getting a pay cut instead. It was ugly.
Great news though, I ended up 6.22%, which means I beat the market by roughly 7%! If I managed a $20-million-dollar hedge fund, I would have taken home a cool 500 to 600k, my clients would have knighted me, and that balled patch in my hair would have grown back… but I do not live that fantasy.
I’m happily in the 99% with my smallish retirement fund, but it’s no fun celebrating alone, so I’ll tell you what it takes to beat the market for 3 years in a row and 6 of the last 7; I was in grad school for the missed year:
- Lesson #1: It takes me roughly 450 hours of research to beat the stock market and that’s me taking short cuts. If I really wanted to do a good job, it would take double that number. I don’t remember the last Spring I got to enjoy. Here’s my advice, just buy the S&P 500 stock index and enjoy life.
- Lesson #2: I started investing when I was 13 years old when my mother convinced me that I had to pay for college. It turned out to be a self-fulling prophecy. Anyway, that gives me over 20 years of experience. If you are just learning the stock market and you have a full time job, forget about it. It took me practicing for 10,000 hours before I even knew that I had to spend another 900 hours every year just to be better than average. Just invest in the S&P 500 stock index and focus on your career.
- Lesson #3: Warren Buffett is a genius. Have you ever solved a really hard algebra question where everything moves from one side of the equal sign to the other… a rubrics cube of abstract symbols? Well, the starting point for the investing equation is the complicated world of Wall Street where even the purveyors of the stuff get confused (read: The Big Short). If you solve for the Wall Street equation, you get Warren Buffett and his deceptively simple “secret” investing formula (FCF/RFR). Unless your stock broker is Warren Buffett (Stock Symbol: BRK.B), who is the only person I trust with my money, I’d just buy the S&P 500 stock index, instead.
I hope this saves you a lifetime of heartache. The S&P500 (SPY) index is pound for pound the best investment in the world and to beat it takes skill, experience and passion.
David T. Durant
