Recently, I saw a very novel point of view, some people say that the annualized rate of 20% is very awesome, but it is actually a **. Warren Buffett's so-called annualized 20% is the result of more than 70 years of investment career average, in fact, in the early days when the amount of funds was relatively small, the annualized growth rate was far more than 20%, and now some investors take 20% annualized as the standard of stocks, which is actually a very absurd joke. And this benevolent brother also listed Buffett's annualized returns at various stages:
Frankly speaking, there is basically no objection to the fact that the last two of these three sets of data, namely the partnership period and the Berkshire period, are available. But about the first set of 1950-1956 annualized 50% data, in addition to the circulation on the Internet, there is actually no basis for rummaging through all kinds of books**, but Buffett himself did say something like this - if the amount of funds is small enough, only $1 million, then you can easily achieve an annualized rate of return of more than 50%. I think this is probably some people's reverie about Lao Ba's early annualized return of 50%, after all, Lao Ba himself said that when the funds are low, he has the ability to achieve this goal.
Of course, putting aside the annualized 50% that is no longer verifiable, the annualized rate of the partnership period is 31The 6% record is also amazing enough, obviously higher than the 20% god-level standard in everyone's minds. However, when we are shocked by the sparkling results, we should not forget the background of the times at that time - the super bull market. It is easy to make money in a bull market, but it is difficult to make money in a bear market, this is a very simple truth, it is ridiculous to talk about the yield separately from the bull and bear, and the correct measurement method is to compare it with the index, rather than looking at the absolute value.
After the end of World War II, the United States experienced a boom period of rapid economic growth, from 1949 to 1968, the index was 662%, or 11% annualized, and the average dividend yield during this period was 416%, so the S&P 500's real annualized return is as high as 1516%。Warren Buffett is indeed very bullish, and his annualized rate of return in the partner stage is more than twice the market average, but in fact, it is not out of the realm of gravity.
If we look at the 1965-2022 period, Berkshire's annualized rate of return is only 198%, which is of course constrained by the amount of funds, but also cannot ignore the factors of the market environment. The average annualized return of the S&P 500 fell to 99%, 198% is still twice the market average. I think Lao Ba can be regarded as the person with the highest investment achievements in the world, which means that the average market rate of return is about twice the ceiling of long-term investment returns.
Let's go back to A-shares, the CSI 300 index went from 923 at the end of 2005 to the end of 202245 points, ** to 387163 points, an annualized increase of 88. Considering the dividend yield of about %, the annualized yield of the market is 10Around 8%, twice the average rate of return of the market is 216%。So may I ask, do you think 20% is considered a god-level standard, you must know that it is impossible for anyone to be completely unaffected by gravity.
Risk Warning: The views mentioned in this article only represent personal opinions, and the subject matter involved is not recommended. ）