dapperdobbs <GeorgeCFL@[EMAIL PROTECTED]
> writes:
> The article below suggests some stocks Buffett might select, if he
> were starting over. The impressive statistics behind Berk****re -
> $1,000 invested in 1965 would be worth $7,000,000 today - would seem
Those numbers aren't quite right. According to the 2007
BRK shareholder letter, the compounded gain from '65 to '07
was 21.1%, not the 23+% you suggest. Either way, it's
astounding, but the end result is vastly different over
the course of 43 years (period inclusive):
At 21.1%, $1,000 grows to $3,760,000
At 22.9%, $1,000 grows to $7,091,000
At 19.2%, $1,000 grows to $1,904,000
The shocking thing is that to do twice as well - over
43 years - as Berk****re did, all you had to add was 1.8%
to your annual returns. To do half as well, you still
had to manage 19.2%/yr average - only 1.9% worse, but
still an astounding feat.
If you actually did half as well as Berk****re - 10.6% -
over 43 years, you end up with only $76,115 from your
initial $1000.
The article may have pointed out to some good ideas for
stock screens - there are many out there, and lots of places
have "buffett-like" screens already set up so you can just
click on them. But the numbers he's starting with to
entice you to play with his screen are just insane. It's
like telling folks they can hit like Barry Bonds if they
take a couple of lessons.
[footnote - in the Berky letter, Buffet quotes cumulative
overall returns of 400,863% for BRK and 6,840% for the
S&P500 (incl. divs) over that period - not quite the same
cumulative total I note above, but he's almost certainly
done some rounding in the posted numbers - with long-term
compounding, as you see above, very very small differences
along the way, can make gigantic differences in the end]
<http://www.berk****rehathaway.com/letters/2007ltr.pdf>
This isn't meant to discourage folks. But they should
be aware of how mind-blowingly far out of the norm Buffett's
results were.
--
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