Your 10 year annualized returns

[Jurgis]

Since we already have the short-term 2016 result poll up, I'm posting more relevant 10 year poll. Maybe gonna add 5 year poll for fun too.

[Underperform]

10 years ago i would be only 11 years old, hopefully i can report back in 10 years and be in the mid/high teens digit returns, one can wish right? hahaha

[AzCactus]

I wasn't 11 but I was 18 so not much of a 10 year track record.  Though given how poor I was at 18 my net worth has zoomed up quite a bit :)

[Jurgis]

You'll get there Grasshoppers.  8)

[Crip1]

This is a more instructive thread than the annual one…both are interesting, I guess, but this is moreso.

It’s rather embarrassing to say that I’ve lost to the S&P 500 over each of the past 7 years, but am 1.5% ahead, annualized, over the past 10 years. Clearly the first three were pretty good. Looking at the past 15 years, I’m close to 4% ahead, annualized, of the S&P 500.

8 respondents returned 30+% over the past 10 years? That’s freaking crazy.

 

 

-Crip

[Jurgis]

This is a more instructive thread than the annual one…both are interesting, I guess, but this is moreso.

It’s rather embarrassing to say that I’ve lost to the S&P 500 over each of the past 7 years, but am 1.5% ahead, annualized, over the past 10 years. Clearly the first three were pretty good.

 

Yeah my 2009 was close to triple digits return. Makes you feel like genius for a while...

 

8 respondents returned 30+% over the past 10 years? That’s freaking crazy.

 

We have some real geniuses around us.  8)

[Viking]

A shade under 15% on average over the past 15 years. 1.) buying out of favour companies. 2.) extreme concentration when valuations get crazy low (for short periods, once every couple of years) 3.) sell companies when they are no longer cheap 4.) continuous learning (tweaking strategy over the years)

 

The most important thing is developing a story for each purchase. If the story gets better you buy more. If Mr Market panics (the stock gets cheaper) you buy more. The key is the story that comes into focus over time (and changes over time). Price is there to serve you. What the experts/analysts are saying is often just noise (and often not a useful piece of information).

 

Cash is a beautiful thing. Sit on cash until you find great investments... they will happen. Don't feel compelled to 'put your money to work' - one of the dumbest sayings I have ever heard.

[bbarberayr]

According to this website - http://www.kiplinger.com/tool/investing/T041-S001-top-performing-mutual-funds/index.php?table_select=SmStock

 

The top 10 year return for small cap stock funds is 21.29% and for large cap is 12.23%

 

So, investors here, on average, beating the absolute best mutual funds out these.  Somewhat surprising, even taking into account the extra costs and restrictions fund have, given how many funds are out there.  But maybe not, given the average person here is far more interested in the market than most.

 

Hope if everyone is calculating annualized return correctly and not just doing an average of the last 10 individual returns, which would overstate things.

[stahleyp]

I'm at 13.38% since of Jan of 2007 (wish I had discovered the board earlier).

 

bbar,

 

On the 10 year small cap I see BCSIX at 12.29%?

[Guest longinvestor]

According to this website - http://www.kiplinger.com/tool/investing/T041-S001-top-performing-mutual-funds/index.php?table_select=SmStock

 

The top 10 year return for small cap stock funds is 21.29% and for large cap is 12.23%

 

So, investors here, on average, beating the absolute best mutual funds out these.  Somewhat surprising, even taking into account the extra costs and restrictions fund have, given how many funds are out there.  But maybe not, given the average person here is far more interested in the market than most.

 

Hope if everyone is calculating annualized return correctly and not just doing an average of the last 10 individual returns, which would overstate things.

 

Buffett went on that rant against actively managed monies at the last meeting in Omaha. And how unlikely it was to be able to beat the low cost passive fund over the long term.  He did acknowledge that it is possible that a very small number of managers could beat; But looking for and finding those managers would be like looking for the proverbial needle in the haystack.  Here at COBF, we seem to have a stack of needles and not much hay at all!

[TBW]

A 10yr track record above 15% I think is awesome.  Above 20% is incredible and 30% is an achievement to be celebrated and studied.

 

To put in prospective 100k at 30% for 10yrs is now ~1.4mil!

 

For those people in the above 20 and 30% buckets would you mind sharing some more details?  I would be happy to compile some facts to see what common themes these returns have and share with everyone.  If you want to be anonymous you can PM and I won't divulge any details.

 

My questions and please feel free for anyone to add to them:

 

Are you a professional?  Or just manage your own money?

Was your returns from stock investing or other (ie. small biz, real estate etc.)?

Were your returns largely from one event or stock (ie. getting US housing trade right or long term compounder right)?

Or were returns through steady portfolio turnover and consistent returns?

What was the best contributing factor to your outsized returns?

Was leverage or options a big component to your returns?

 

On more lifestyle questions:

What has changed in your life after such large returns?

Do you still spend as much time investing as you did before?

 

Thanks in advance for anyone that contributes.

[KJP]

All return related threads have a very healthy amount of survivorship bias. 

 

It would be very interesting to know whether the answers to your questions from the people who managed to earn 30+% CAGR over 10 years are actually any different than the answers of the people who had terrible returns for three years and then gave up, e.g., both groups used leverage or invested heavily in levered equities or both groups at least intended to invest in long-term compounders.  The winners are generally happy to talk; I don't know how to track down the other group.

[TBW]

Totally agree. Thats why I am so curious to learn more. I am also very interested in people that achieved such returns away from public markets. Or through some combination of both.

[SharperDingaan]

You may want to keep in mind that the person you were 10 years ago is not the same as the person you are today.

Stage of life, ability to take on risk, and the markets themselves - all change significantly over the intervening period.

 

Most investments will also go for 2-3 years first, before they start generating (think start-ups, real estate, etc.).

Hence a 10 year record is not necessarily going to reflect the same type of investments, or their stage of development.

 

SD

[Uccmal]

Now that we have gotten philosophical...

 

Would the answer "I dont know" suffice. 

 

I just read an article in Skeptic magazine about reversion to the mean.  I think it sums up part of the strategy. 

 

Investing is after all just gambling.  It differs from Las Vegas in that the odds can be shifted in our favour, minimizing the effect of bad luck as much as possible. 

 

I will be the first to admit that I am not a good financial analyst.  When I look at balance sheets my main goal is to determine if a given company will stay solvent long enough to revert to the mean. 

 

I think this is how Buffett invested from the late partnership days until the late 90s.  He knows from long experience that things operate in cycles.  i.e. During the peace everlasting days of the late 80s, early 90s, he bought Gen. Dynamics.  He has done this over and over.  Walter Schloss took the idea to the extreme.  He invested purely on statistics.  Buffett was much more qualitative.  I am more qualitative. 

 

Take the oil crash, and the correlated bear market in Canadian equities last year, as a perfect example.  I took the opportunity to load up on blue chip Cdn. companies that were beaten down for no tangible reason.  This is where the gambling component comes in.  We are assuming that reversion to the mean will still happen. 

 

At this point we need to assess an industry qualitatively.  Reversion to the mean only works if you can determine if a mean actually exists.  In some industries such as pulp and paper, I dont think we can answer that.  So stay away.  On the opposite side, we can reasonably know that Apple will reach a sales pateau, or at least a reversion to normal growth. 

[bbarberayr]

All return related threads have a very healthy amount of survivorship bias. 

 

It would be very interesting to know whether the answers to your questions from the people who managed to earn 30+% CAGR over 10 years are actually any different than the answers of the people who had terrible returns for three years and then gave up, e.g., both groups used leverage or invested heavily in levered equities or both groups at least intended to invest in long-term compounders.  The winners are generally happy to talk; I don't know how to track down the other group.

 

Very good point.  Kind of makes a survey like this, while interesting, not particularly meaningful in looking for benchmarks and trends.

[SharperDingaan]

A more technical way of looking at this ….

 

Think of CAGR as how long to double your money.

It is a compound return, so plug PV=1, FV=2, and N=holding period into the financial function of a calculator - and i will be the CAGR. For the 1-5 year holding periods the CAGR’s are 100%, 41%, 26%, 19%, and 15%. For years 6 through 10 its 12%, 10%, 9%, 8%, and 7%.

 

Just starting out, we are all no different to any other start-up. Losses in our early years while we learn, and the vast majority unable to stick it out until they at least break even.  In the real world we call that bankruptcy, in the investment world we call it tuition. If we survive, & it’s ‘truly’ our thing; our returns are more likely to look like years 6-10 - and comprise a string of losses with one or two big wins at the end. Most of us would be in our mid 30’s. 

 

We EVENTUALLY learn, and now choose to invest in any given sector over a 4-5 year time horizon; our own preference is the cyclical industries that we know – buying in the troughs and selling near the peaks. A 4 year holding period is a 19% CAGR, a 5 year period is a 15% CAGR; pretty much what we see on this board. Assuming kids along the way - most of us will also be in our late 40’s, early 50’s; & a lot ‘wiser’ than we used to be.   

 

CAGR is a deceptive measure, it says nothing about the volatility along the way. When we’re retired we have less risk tolerance for the downside, and CAGR’s start to resemble years 6-10 again; primarily because we’re extending the hold period through greater use of FI over equity instruments. Still very good, but ½ what they were.

 

Age & stage of life matters - hence the philosophy.

Experience matters – lower downside volatility shortens the hold, raising CAGR.

Counterculture matters – set the game, don’t drink the cool aid.

 

Notable is that pretty much all the folks who do this well (WEB, Morgan, Rockefeller, Rowlands, Gates, Jobs, etc.) are NOT establishment; the establishment BECOMES THEM. Rebels get assimilated.

 

SD   

 

[Guest longinvestor]

A 10yr track record above 15% I think is awesome.  Above 20% is incredible and 30% is an achievement to be celebrated and studied.

 

To put in prospective 100k at 30% for 10yrs is now ~1.4mil!

 

For those people in the above 20 and 30% buckets would you mind sharing some more details?  I would be happy to compile some facts to see what common themes these returns have and share with everyone.  If you want to be anonymous you can PM and I won't divulge any details.

 

My questions and please feel free for anyone to add to them:

 

Are you a professional?  Or just manage your own money?

Was your returns from stock investing or other (ie. small biz, real estate etc.)?

Were your returns largely from one event or stock (ie. getting US housing trade right or long term compounder right)?

Or were returns through steady portfolio turnover and consistent returns?

What was the best contributing factor to your outsized returns?

Was leverage or options a big component to your returns?

 

On more lifestyle questions:

What has changed in your life after such large returns?

Do you still spend as much time investing as you did before?

 

Thanks in advance for anyone that contributes.

 

Did you get responses? Buffett just said he knows10 named people who've beaten the market. Here at Cobf, 18 of us have beaten the index, beaten everybody else ;) And the last 10 years included the crisis of a generation. Maybe they should come forward and challenge Buffett.

[TBW]

Unfortunately I had no one respond to my request.

 

I am still very happy to compile/interview anyone with 10yr returns >20% and share their anonymous answers with the group.

[stahleyp]

so my 10 year returns are 14.26% - Jan 31st 2007-Jan 31st 2017 (according to what I see, the S&P 500 was at 6.99% during that time.

 

[Jurgis]

so my 10 year returns are 14.26% - Jan 31st 2007-Jan 31st 2017 (according to what I see, the S&P 500 was at 6.99% during that time.

 

7% boundary in the poll was not chosen accidentally, you know.  8)

[CorpRaider]

Pretax CAGRs: 10 Years

(as of 12/31/16)

 

VOE - 7.67%

VBR - 7.77%

RPV - 7.69%

VIG - 6.96%

VTI - 7.23%

 

 

[TBW]

So far I have 2 responses to my questions to those with huge outsized returns.  Anyone else want to add before I compile?

 

Thanks in advance for any contributions.

[randomep]

so my 10 year returns are 14.26% - Jan 31st 2007-Jan 31st 2017 (according to what I see, the S&P 500 was at 6.99% during that time.

 

You should compare against the S&P 500 TR return which I estimate is 7.3% over that period.

 

[stahleyp]

random,

 

where are you getting the 7.3%? I reran the numbers and I was off a little - I just went with what my brokerage firm said before. On morningstar, I came up with 7.06% for S&P 500 with dividends.