Jay, I know it seems wild. Counter-intuitive, that someone could actually pull off a gain like that. However, I have done the math...actually my H-P 19B did it for me. Each year, the investment is $2,000, placed in a Roth IRA, and stocks picked gain 50% annually. I ignore commissions because they're an insignificant amount, especially if done on-line. The keys are two: compounding, and stock selection.
On that subject, consider: Over the past 6 years, one of my sons has held HD, and another has held MSFT. Both bought their shares with gift money from me, and their results are vastly different. Neither has sold or added to the original position. The son with HD has gone from $2,000 to just under $12,000, while the young man with MSFT has now nearly $33,000. If you leap to the conclusion (not certain of course) that the next six years will be like the last six...both companies now being fairly predictable...the HD will grow to about $70k, and the MSFT will be roughly $550k.
Run it out to 20 years and the numbers are $700k for HD, and $24 mil for MSFT. As you can see, the faster growth of the tech company is making a hugh difference already, and if this pattern persists, the big tech's advantage will be even greater. One has grown at 34%, the other at 60%. Neither are shabby, but the results are vastly different.
You might not feel this is possible. But why not? For each investor who really works at selecting maximum, steady growth...it will be possible. Where to find such companies? Start by joining the thread entitled <Gorilla and King Portfolio Candidates>. There, you'll find about 30 of them...in two portfolios. The emphasis on this thread is
all about finding these growth companies, not with luck, but by developing an understanding of why they're growing, and why it's likely to continue.
About a year ago, more than that actually, I allowed myself to get sucked off base...dumping my own MSFT to buy RADA. I came out of the experience whole (luckily) but instead of looking for triples, I would have been better off sticking with MSFT.
Before you dismiss this notion, Jay, visit over there for a while, and then come back to me if you wish, with any second thoughts. |
