Just a journal entry:
You know what I am realizing - something I am doing with investing must be about right. It seems like I make a ton of mistakes, sell stuff too early, sell stuff too late, buy falling knives, etc., but none of it really matters. Still beating the overall market by about 5-6x the S&P 500 index easy. I feel like I'm screwing up left and right, but it doesn't really matter. Sure, I was really lucky with a few stocks (NFLX, FSLR 30%), but I was also really unlucky with a few (LF, RUSS). None of it mattered. What i am thinking though is that if the S&P 500 has a good year, say 30%, I will not be 4-5x the returns, 150-180% would be crazy. It is probably easier when the returns of the S&P are 2%. But I could see being 2x the returns or more.
I think it is really all about buying stocks using value principles. The S&P 500 index tracks both underpriced and overpriced stocks. By buying the underpriced stocks, you will clearly beat the index returns by a factor of 2x+. It also has a side benefit during major market corrections. If you buy stocks that are already beat down, they don't have the "room" to correct as much as the stocks that are way up high.