| | Well, if he has good reason to believe that sticking with the tried and true will cause him to forego large and easy profits, then why wouldn't he abandon it? What he may mean is that he doesn't think that the new approach is likely to generate large and easy profits, even though there is a chance that it will. In that case, he is, of course, correct.
I myself follow the advice of investment advisors, like Bob Brinker, even though I don't fully understand the basis on which they make their recommendations, since they would be fools to convey the details of their market-timing models to their subscribers. If they did, their clients wouldn't need or pay for their advice.
There is such a thing as a division of labor and division of knowledge, in which a layperson pays an expert for advice. Of course, if you are acting with less than complete knowledge or less than full understanding, then you will need some criteria for evaluating the advice of the experts you are consulting, since even experts can be wrong, which is why people get second and third opinions.
Of course, Warren Buffett is himself an expert, so in that case, he may have no reason to trust an approach that he doesn't fully understand, even if its performance happens to be superior to his own, since in doing so, he would have to evaluate its author's investment acumen as superior to his own. And I very much doubt that he thinks there is another investor who meets that qualification.
- Bill
(Edited by William Dwyer
on 6/10, 8:24pm)
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I will not abandon a previous approach whose logic I understand, even though it may mean forgoing large, and apparently easy, profits to embrace an approach which I don't fully understand, and have not practiced successfully.
