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Buffett and Beyond: Uncovering the Secret Ratio for Superior Stock Selection, + Website, 2nd Edition by Joseph Belmonte

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Chapter 18

Great, Great Job, But You're Fired

Now that you know the simple rules of structuring a great growth portfolio, let's take a break from the rules and the numbers while I tell you the story of a group of my students who were able to more than double the returns of the market during the bull market years of 1998 and 1999, simply by following the rules you just read about in the previous chapter. They did so well that I was almost fired as their instructor. Why? Because the academic community teaches its students that they cannot outperform the market averages without taking on more risk than the risk of the market. And here was a class of students that were knocking the socks off the professional money managers out there in investment land. Those of you from the world of academia will certainly relate to this story.

A New Definition

The definition of “stupid” is when smart people do dumb things. This is my very own definition, and you'll see how it comes into play toward the end of this segment. The good thing about smart people is they have the ability to realize they are being illogical, and they also have the ability to reverse their periods of insanity, which you will also see later in this chapter.

The Research Begins

I began the doctoral program at a university that was able to differ itself from the mainstay type of school in that you didn't have to be a full-time student in order to enter the program. This school had two time periods in which the courses were taught. ...

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