On a bit of a tear this morning with stupid things I have heard and been sent recently. I had heard someone say that 50%pa is a solid achievable return…..in what f^$ken universe is that realistic. Consider that table below in which I have taken a starting capital of $1,000,000 and compounded it at 50% on a daily, monthly and yearly basis for 20 years. As you can see compounding yearly is a bit of a let down as you are only walking away with $3.3B – compound daily and you pocket $21B. A more middle of the road approach with compounding mostly leaves with a comfortable $17B For shits and giggles I extended the daily compounding period out to 30 years and got the figure of $3,235,633,845,414.08. For people like me who have trouble reading such large numbers that is a lazy $3T.
For a bit of comparison, the chart below shows the yearly returns of the Medallion Fund which is probably the most successful hedge fund in history.
Source – Bloomberg
Clearly, the clever clogs at Medallion are letting the side down……according to the internet….