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If you believe what Gra Ben Graham said that you know this horizontal line is fair value and this is stock prices around that horizontal line sometimes too high sometimes too low and you have a discipline approach to valuing businesses the last man standing will be what's called time arbitrage another word for patience oh am I going to make money in the next 6 months or year but sometime in the next year to 5 years is this going to be trading for more am I going to get a good return and can I be patient how has the investor the management business changed since you first started and what do you see for it in the future?
Because to me it seems like it's very saturated market. You have a lot of people concerned about computers and AI although I don't personally think that's a concern. I think you shared the same sentiment. I'm just curious to get your take on that. Well, there definitely more computers and uh I think I don't know enough about AI because I'm super excited about it.
So, it could be really terrible, but I think it's pretty cool. Um uh but I would say uh and and I'm asked this question every year uh you know I stopped teaching a few years ago but for the 23 years I did teach every year someone raises their hand say hey Professor Greenwock congrats on a great career but you know now it's more computers more people [snorts] uh competition it's harder everything else and I say well you know Uh, let's go back.
Uh, I used to say, let's go back to 1997 when you guys learned how to read. But maybe some of you guys weren't born. I don't know. Uh, but uh let's let's look at the uh most followed market in the world. That would be uh S&P 500. And let's take a look at what's happened since then. And so I tell them from uh 1997 to 2000 uh the S&P doubled from 2000 to 2002 it have ftd and from 2009 you know uh it's tripled and now it just fell uh 20some percent.
We'll see what happens. Um, and the S&P 500 is an average of 500 names. If uh you look under the covers, there's a lot of dispersion amongst those 500 names during that period. So if you believe what Gra Ben Graham said that you know this horizontal line is fair value and this is stock prices around that horizontal line, sometimes too high, sometimes too low and you have a disciplined approach to valuing businesses.
uh still plenty of opportunities and that's just the last 25 years or so. Uh that's the story of the last 25 years or so. A lot of emotion and the other thing I would say is no matter how much kind you know think about it there's not a lot of data over the last 30 40 years uh you know for the last 30 years there's 10 three-year periods that don't overlap to figure out whether some investment strategy or other works.
Okay. Yes, there's fast trading. There's a, you know, if you trade second to second, there's a lot of seconds in that 30 years. Well, if you have a fast trading thing, those guys are going to compete that away. They have a lot of data. And I wouldn't go there because you need really fast computers and really smart guys and everything else.
But the last man standing will be what's called uh time arbitrage. And that means another word for patience. uh you know not looking oh am I going to make money in the next 6 months or a year but you know sometime in the next year to 5 years is this going to be trading for more am I going to get a good return and can I be patient you know I will tell you you know I sat on numerous endowments uh and endowments are perpetuities meaning they should supposed to be around for ever and they should have the longest time horizon uh fortunately the big ones uh they have a guy or uh you know a person who is in charge of uh you know US equities or bonds or real estate or whatever it might be and they their job is not a perpetuity.
they have a benchmark and if they don't beat it for the last three years, I'm not saying they get fired, but they don't get a parade, you know, uh if if they don't do well and so uh you have an agency problem, which is good for patient investors because you as an individual anyway or you as a patient professional uh if you have that luxury uh have an advantage uh which is sticking to your guns and being more patient than everybody else uh if you're good at it.
Uh and so that's not going away. That's actually that time horizon's getting shorter uh because everyone you everyone has a lot of data and it's available every day and every minute on your phone and uh time horizons are shortening, not lengthening. And that's good news. And so that's where I'd look for my opportunity. And that's not going to change. That's actually better. So good luck.
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