Conclusions (2.3)

As I asserted at the beginning of this book, we, my friend, are no unicorns.  We don’t have the social networks, the scope of business knowledge, or the massive bank roles that the real unicorns use to beat the market.  Unless you want to quit your day job and become an entrepreneur, you don’t have the time to try to invest in inefficient markets, which is in my belief the secret to beating the market.  There is no free lunch in Wall Street, but you may be able to find one on Main Street if you know what to look for.

The Yale University endowment didn’t grow from just under one billion to over 27 billion in 25 years by buying the S&P 500, and that’s how Swenson beat the S&P 500—how chose his games wisely and calculated his edge precisely.  This means that we have to sit down at the card table knowing we do not know how to count cards and that the house has an edge in the short term.  We can’t beat the house, so our only option is to become the house.  We invest for the long term, keep the faith that markets will go up and economies will expand and grow with time, and control the risk factors that are within our span of influence.

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