Even God Couldn’t Manage Your Money Without Getting Fired

Ben Graham — the father of value investing and Warren Buffett’s mentor — said it best:

“The investor’s chief problem, and even his worst enemy, is likely to be himself.”

That’s not just a clever turn of phrase. It’s the single biggest truth most investors ignore.

And if you want proof, just look at what my friend Dr. Wes Gray uncovered in one of the most eye-opening investment studies I’ve ever read.

Wes runs Alpha Architect, a money management firm grounded in evidence and disciplined thinking. 

Before that, he was a finance professor and a Marine Corps officer, so when he speaks, I pay attention.

In a research paper titled “Even God Would Get Fired as an Active Investor,” Wes takes on a wild thought experiment.

Imagine a portfolio run by “God” — an investor who knows, with perfect foresight, which stocks will be the best performers over the next five years.

Not guesses. Not projections. Not analysis.

Actual, divine-level certainty.

Wes and his team built a model using stock data from 1927 through 2016 across the 500 largest companies on the NYSE, Nasdaq and AMEX. 

Each year, this “God Portfolio” would select only the top 50 performers of the next five years and hold them.

The results?

A staggering 29% annual return — nearly three times the historical average of the S&P 500.

But here’s where it gets good…

Even with perfect knowledge — even knowing the future — the portfolio went through bone-crushing volatility. 

In fact, it suffered 10 separate drawdowns of over 20%, including a jaw-dropping 76% crash during the Great Depression.

It also dropped nearly 40% during the dotcom bust. Then again, during the 2008 financial crisis.

So ask yourself: If a money manager showed you those kinds of drawdowns — even if they ended up tripling the market over time — would you stick with them?

Most wouldn’t.

That’s the punchline of Wes’ paper.

Even God, with flawless stock-picking ability, would get fired as a professional investor.

Why? 

Because clients judge performance over quarters, not decades. And most investors can’t stomach short-term pain — even if it leads to long-term riches.

I saw this firsthand when I managed money for nearly four decades. 

During rough markets, clients weren’t asking about long-term value or business fundamentals. They wanted to know why their portfolio was down that month.

And if you couldn’t give them the answer they wanted, they pulled their money.

It didn’t matter that they might be selling out of great businesses at bargain prices. They just didn’t want to feel the pain of temporary losses.

But that’s exactly the kind of thinking that kills long-term returns.

Investing in stocks is the single greatest wealth-building tool ever created. But it only works for those who can endure short-term volatility.

If you're looking for guaranteed, smooth returns, stick with treasury bills. The yield might be low, but so is the drama.

But if you want to build wealth… if you want to own pieces of great American businesses and let them compound over time… then you have to be willing to go through rough patches.

As Warren Buffett says, “No matter how great the talent or effort, some things just take time.”

Short-term market noise is just that — noise.

It doesn’t matter whether you're a first-time investor or have a crystal ball with tomorrow’s winners. 

What matters is whether you can stay invested.

Because time in the market beats timing the market — every single time.

So don’t be shaken when your portfolio hits a rough patch. 

Not even God could avoid them.

The key is staying the course.

And if you do that, the rewards will come.

If you have questions, you can send them to me at [email protected].

And follow me on X here for daily updates.

Regards,

Charles Mizrahi
Prosperity Insider

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