mpr I believe I covered most of your points in this 4 page thread but I'll go over them once again.
-Most fund don't beat the market because they are too big and lack flexibility (too many restrictions in their mandates) not to mention they are generally too focused on the short-term. Also they are more focused on maximizing assets under management than maximizing performance. They are two completely different and sometimes incompatible objectives.
-Most finance courses are absolute non-sense and teach garbage which does not hold true or work in the real world. Also most people including finance students lack patience and a long-term focus. Also most finance courses are taught by academics rather than top class practitioners. If you look at some of the courses at Columbia business school, some of these courses were taught by people like the legendary Joel Greenblatt and they produced a lot of successful students. Look at all the people of Warren Buffett's generation who studied under Ben Graham and David Dodd. Those classes produced a crop of legendary investors such as Warren Buffett and Walter Schloss. If you include people who say they were heavily influenced by Ben Graham you have names such as William J. Ruane. Irving Kahn. Jean-Marie Eveillard. Seth Klarman. Bill Ackman. Most finance students have crappy professors. The ones who had seasoned and successful investors (quite rare) as their teachers tended to do well. Read the speech by Warren Buffett:
https://www8.gsb.columbia.edu/articles/c...rinvestors
Here is what what was written in one of the reviews of the book Security analysis (the book was written by Benjamin Graham and Davidd Dodd):
"It may take months and years for Graham to teach you the lessons you need to learn, but he will teach you, just as he taught Buffett. Remember Buffett wasn't his only successful student. There were many other MASTERS that were created in that classroom at Columbia so many decades ago. An example are the folks that ran and run Sequoia Capital, a value hunting firm that's been around for decades, outperforming all their competitors.
There is really no other book that can give you the FORMAL GROUNDING that you need to become a true player in the stock market. Even now, forty years after I started reading Graham and Dodd, I am still learning something on every page I read over and over again.
Many other reviewers have taken the time to explain what it on those pages; I will not rehash them here. I need to motivate you to ACT, to click the button that says, I want to own this book, so please allow me to share one or two stories with you.
When I was a teenager going to college in New York, my accounting professor got me an afternoon job with John W. Bristol, the foremost money manager of the 1950's and 60's. He ran the Princeton University portfolio among many others of equal prestige. Always sitting behind him was a well-worn copy of Graham and Dodd.
Two years later with Arthur Andersen, I had the honor of auditing the richest man in the world - Daniel K. Ludwig. He was worth $5 billion in the early 1970's. No education, 5th grade maybe, and forget college. Behind him was Graham and Dodd, the only book there, and it was underlined and annotated. This man was secretive and shy; he had only two friends in life - Howard Hughes, and Clark Gable."
Also the point is that even if you are only investing $25,000 the extra gains won't make much difference to you but the extra knowledge learned will. Maybe if you are investing $25,000 today in 10 years time after saving and investing every year you might be investing $600,000. At that point the skills and knowledge you gained will help you generate a strong return from that $600,000. Getting 6% out-performance on $600,000 is equivalent to an extra $36,000 of return. Is that not worth your while? Maybe twenty years after first investing that $25,000, through a combination of saving and investing every year maybe you will have $1.5 million at your disposal. At that point 5% out-performance is an additional $75,000 per annum in return.
Contrary to your assertion, people like Buffett and Joel Grenblatt have consistently pointed out that size is the enemy of performance and is in fact a huge anchor weighing down performance. There is a reason why Berkshire Hathaway is generating far lower returns than 30 or 40 years ago. In fact Buffett stated many years ago if he only had $1 million dollars to invest he could get a 50% per annum return. If you are investing $10 billion dollars that excludes a lot of micro-cap companies and smaller real estate opportunities. Not too mention the difficulty in getting into and out of positions.
Spaniard88 there is some merit in your strategy but typically by the time an investor becomes really famous they are investing so much capital that their returns while still decent will be nothing like their earlier years. So by you copying them you get the disadvantage of size (not investing in micro-caps or other smaller opportunities) without the advantages. What I mean by you not getting the advantages is for example you won't get access to the private bond, private preferred stock and private share placement deals, private derivatives contracts, buying unlisted/private companies, etc that Berkshire Hathaway or guys like Carl Icahn sometimes get. So I do not necessarily advise shadowing people like that.