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The Secret To Attaining (and Recognizing) Wealth — Know Your Number
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Blancpain Offline
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Post: #26
RE: The Secret To Attaining (and Recognizing) Wealth — Know Your Number
(01-27-2018 09:52 AM)Bushido Wrote:  ^ A 30% a year annual return would be above Warren Buffett's average. Probably the greatest investor of all time. Just saying.

This crypto craze has fucked with peoples perception, after seeing returns of 1000% a year, they think 30% can be sustainable while being safe.
01-27-2018 09:54 AM
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Tail Gunner Offline
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Post: #27
RE: The Secret To Attaining (and Recognizing) Wealth — Know Your Number
(01-27-2018 09:52 AM)Bushido Wrote:  ^ A 30% a year annual return would be above Warren Buffett's average. Probably the greatest investor of all time. Just saying.

It may seem really smart to throw out a quip such as this one, until you ask the question "why"? This comment is a perfect example of EXACTLY why I urge forum members to commit to learning about business, finance, investing, or any other field by investing in yourself for 15-30 minutes every day for years (or even decades). Be an autodidact.

Most knowledgeable people would just shake their head and walk away after someone made such a comment. I really am trying to help you guys out, by spurring you to think outside the box and to improve yourselves. There are three things that you must consider when making any investment (or any major life decision): (1) things you know, (2) things you don't know, and (3) things that you don't know that you don't know. You can survive the second category by simply educating yourselves. It is the third category that is the real killer.

Anyone who knows even the most elemental rules of investing knows that investment yield decreases inversely to the size of an investment fund. Large funds, such as Warren Buffet's, cannot snap up the smaller investments that originally contributed to their success. Many funds underperform the market indices and eventually go out of business because of this very fact. Warren Buffet is famous, in part, because he made such consistent returns despite this obstacle. It is axiomatic that smaller investors can produce far higher yields than Warren Buffet when not operating under such constraints.

Quote:Warren Buffett talked about the problem that investment success can bring about in his 1995 shareholder letter:

The giant disadvantage we face is size: In the early years, we needed only good ideas, but now we need good big ideas. Unfortunately, the difficulty of finding these grows in direct proportion to our financial success, a problem that increasingly erodes our strengths.

The problem is that it’s unlikely that a portfolio manager or fund marketing executive will admit that size is the enemy of investment performance. It’s really up to the investor to set realistic expectations for the scale of any strategy they invest in by ensuring there are enough opportunities and liquidity available in the investable universe.

This doesn’t mean you should give up on a fund or strategy simply because it attracts investor capital. But it does mean that investors need to be aware of the possibilities for expected future returns based on size of the fund when the performance was earned in relation to the current size of the fund.

The life cycle of many successful funds goes like this: (1) Establish a solid track record with a small amount of invested capital, (2) Attract new capital based on the performance history and (3) And after too much new money has entered the fund, underperform because it is much harder to secure big gains with a larger fund size.

In a way past outperformance can be a fund manager’s biggest hurdle for future outperformance.

http://awealthofcommonsense.com/2014/09/...rformance/
(This post was last modified: 01-27-2018 11:18 AM by Tail Gunner.)
01-27-2018 11:09 AM
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Bushido Offline
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Post: #28
RE: The Secret To Attaining (and Recognizing) Wealth — Know Your Number
(01-27-2018 11:09 AM)Tail Gunner Wrote:  
(01-27-2018 09:52 AM)Bushido Wrote:  ^ A 30% a year annual return would be above Warren Buffett's average. Probably the greatest investor of all time. Just saying.

Most knowledgeable people would just shake their head and walk away after someone made such a comment. I really am trying to help you guys out, by spurring you to think outside the box and to improve yourselves.

No they would walk away right when you mentioned 30% average return. Hah.

PM me for accommodation options in Bangkok.
01-27-2018 11:16 AM
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Blancpain
Tail Gunner Offline
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Post: #29
RE: The Secret To Attaining (and Recognizing) Wealth — Know Your Number
(01-27-2018 09:54 AM)Blancpain Wrote:  
(01-27-2018 09:52 AM)Bushido Wrote:  ^ A 30% a year annual return would be above Warren Buffett's average. Probably the greatest investor of all time. Just saying.

This crypto craze has fucked with peoples perception, after seeing returns of 1000% a year, they think 30% can be sustainable while being safe.

I truly shake my head with sadness when I read such comments. Please, for the love of God, educate yourselves. Here is an excerpt from an article that I read just yesterday. It is authored by Simon Black, with whom many members of this forum are familiar (because he is an offshore guru who travels the world searching for investment and arbitrage opportunities).

He bought a business for $1.5 million that produces a $1.5 million profit per year. So, he makes a 100% annual yield on his investment. This is not overly unusual, if you take the time to educate yourself, network, and search for such opportunities. People do it all the time when they buy internet businesses. By comparison, I am lazy. I spend 15-30 minutes per day sorting through emails (after spending years getting on suitable lists) searching for investments that provide a minimum of 20% to 30% annual yields. Only after weeding through the garbage do I take the time to travel and place boots on the ground.

Quote: As an example, I acquired a business in Australia about two years ago at a time when the Australian dollar was at a near decade low against the US dollar.

Even better, I picked up the business for an amazing deal, roughly 1x the company’s annual profit (about $1.5 million).

In an age of bubble markets where even poor-quality assets trade for 100x annual earnings on major stock exchanges, this Australian business was a real bargain... a deeply undervalued asset.

https://www.sovereignman.com/investing/c...eak_dollar
(This post was last modified: 01-27-2018 11:37 AM by Tail Gunner.)
01-27-2018 11:35 AM
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Bushido Offline
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RE: The Secret To Attaining (and Recognizing) Wealth — Know Your Number
The average long-term ROI is different from a one year ROI my friend.

Stepping out of this thread, but hoping you aren't trying to solicit members of this forum for dodgy investments.

PM me for accommodation options in Bangkok.
01-27-2018 11:45 AM
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Tail Gunner Offline
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Post: #31
RE: The Secret To Attaining (and Recognizing) Wealth — Know Your Number
(01-27-2018 09:46 AM)Blancpain Wrote:  Calling the stock market a scam while saying its possible to earn 30% a year safely is really contradicting.
If you seriously think becoming an organic farmer is safer than investing into blue chips then there is no need to argue with you.
We are 3 generation of farmers on my moms side, even though we own huge plots of land Farming is still a very risky business.
Hell even real estate has its risks, and the returns on real estate are very modest (5-15% annualy)

If you are smart enough to earn 30% passively in your investment every year then you you'll have way more than 100k saved up trust me, 100k will be your monthly living expense if you are that smart.

Earning 30% a year is definitely doable, but it will bring with it major risks. Maybe you are not experienced in that field to see those risks yet.

But I'll give you a glimpse of few risks assosicated with farming

1. Bad Harvest.
2. Health epidemic ( Swine flu, H1N1, new form of disease which eats your crop, health scare regarding that product)
3. Fluctuation in prices
4. Your fixed costs increasing overnight (1970 gulf oil crisis)
5. Mother nature ( Earthquake, Flood, Volcano erupting)

Hey, here is an idea. Invest in organic exotic fruit for which there is a real shortage (so that they are impervious to price drops), sell the entire crop years in advance (to lock in your profit), in a country where there are no natural disasters that can possibly impact your harvests, where there are three independent sources of water (river, well, and yearly spring rains that are captured in man-made ponds), hybridize your crop so that it is naturally resistant to pests, and then plant neem trees around your crops to naturally discourage any pests. I am familiar with such farms.


(01-27-2018 09:46 AM)Blancpain Wrote:  Not to mention the bigger your capital, the harder it becomes to generate attractive returns outside of the stock market.

Warren is worth like 70 billion right now, can he sustain 30% annual growth? If he could he would be worth 400-500 billion in no time.

If you have small sums like 10-20k, its easier to earn 30% on it. But the bigger it is, the harder it becomes.

I give you credit for making such an observation. This is the reason why small intelligent investors can routinely outperform Warren Buffet. So, unlike the defeatists on this thread, at least you acknowledge that such investment opportunities are within the realm of possibility.
(This post was last modified: 01-27-2018 11:56 AM by Tail Gunner.)
01-27-2018 11:53 AM
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Tail Gunner Offline
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Post: #32
RE: The Secret To Attaining (and Recognizing) Wealth — Know Your Number
(01-27-2018 11:45 AM)Bushido Wrote:  The average long-term ROI is different from a one year ROI my friend.

Yes, you are correct. The average long-term ROI will likely rise as the new ownership brings greater efficiency to the enterprise.


(01-27-2018 11:45 AM)Bushido Wrote:  Stepping out of this thread, but hoping you aren't trying to solicit members of this forum for dodgy investments.

Here we go. When logic and reason fails, it is time for the ad hominem attacks. I am always amazed that threads about finance and investment draw almost as much hate as those about politics and religion. It is almost as if the subconscious realization of the need for self-improvement causes people to lash out, because it is easier to lash out than to consciously recognize the need for self-improvement and to take action. It really says a great deal about the human condition.
(This post was last modified: 01-27-2018 12:19 PM by Tail Gunner.)
01-27-2018 12:18 PM
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worldwidetraveler Offline
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Post: #33
RE: The Secret To Attaining (and Recognizing) Wealth — Know Your Number
(01-27-2018 09:52 AM)Bushido Wrote:  ^ A 30% a year annual return would be above Warren Buffett's average. Probably the greatest investor of all time. Just saying.

I don't know squat about the stock market. If I were to invest based on returns alone, I would go for multi-units where one could leverage with bank loans. I don't know about 30%, but 15% to 20% is very doable.
(This post was last modified: 01-27-2018 02:36 PM by worldwidetraveler.)
01-27-2018 02:35 PM
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