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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (74737)	12/31/2023 12:40:58 AM
From: Sisyphus	Respond to of 78842

Mr. Senior, Couldn't agree more. Well done Grommit! A 13.6% IRR over 19 years can only be described as an ASTONISHING achievement. In the spirit of sharing, over the last 8.75 years (since I started tracking my returns) I've only managed to earn an 11.8% IRR. Thank you for reminding us (me) of why some folks here deserve greater respect and recognition. Gratefully yours, Sisyphus

To: Paul Senior who wrote (74737)

12/31/2023 1:20:56 PM

From: E_K_S

1 Recommendation

Recommended By
Harshu Vyas

Read Replies (1) | Respond to of 78842

The Power of Compounding and reinvestment of dividends:

I had BARD AI go through and calculate my CAGR for one of my best buy & holds Armanino Foods(AMNF) from my 2010 Buys at $0.65/share. AMNF for me continues to be a value/growth hold and for a micro cap an excellent dividend payer (3% per year since I have owned it in 2010).

I also had AI BARD do the same calculation for the $SPX, NASDAQ & IWM indexes including dividend reinvestments.

Notice how the CAGR changes if you reinvest those annual dividends over the period (for AMNF it is/was 13 years).

Here's the updated table with the correct CAGR considering the 2010 starting price near $0.65/share, the year-end 2023 closing price of $5.20, and the 3% annual dividend:

Index CAGR (2010-2023)Dividends Included

AMNF (Total)**	17.98%	Yes
AMNF (Price Only)**	12.07%	No
S&P 500 (with dividends)**	12.51%	Yes
NASDAQ (with dividends)**	14.46%	Yes
IWM (with dividends)**	11.58%	Yes

Explanation:

AMNF CAGR (Total): This calculation considers both price appreciation and reinvested dividends. For each year, the dividend income was added to the closing price before calculating the annual return. This resulted in a CAGR of 17.98%.
AMNF CAGR (Price Only): This calculation only considers the price appreciation of AMNF, excluding dividends. The starting price was adjusted to the near $0.65/share, and the CAGR was calculated based on the year-end 2023 closing price, resulting in 12.07%.
Index CAGRs: The CAGRs for S&P 500, NASDAQ, and IWM also include reinvested dividends for the respective periods.

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The takeaway: Have your dividends reinvested if you believe the company continues to be a good performer over the next decade. The power of compounding impacts your total return significantly!