Replies to post #107960 on Value Microcaps Motherboard

[lentinman]

SSK:

Your calculations are screwy IMO as I have no idea how you arrive at +7.8%.

Here are the numbers.

The Dow today is 8852. Assume inflation is 3%. Therefore, the REAL Dow price in 10 years is 11896. That's no gain in your investment based on inflation. (1.03 to the 10th power times 8852)

If the DOW actually ends at 14,000 in 10 years, that is a 1.64% real return. (14,000/11896 = 1.1769 or +17.69%). (1.0164 to the 10th power = 1.1766).

So, if it DOES take 10 years to get to 14,000 from today, that's a pathetic return (+1.64%) - excluding dividends. But, as I say, and have said for every year I have been on VMC, in bad times VMC stocks will probably underperform. Additionally, VMC stocks don't pay dividends. So, if the Dow truly IS 14,000 in 10 years (which is not a prediction, just wouldn't be surprised), our stocks will not have fared much better than an inflation adjusted 1.64% IMO.

Obviously, that does NOT factor in good trading, just holding in the same manner as the Dow index holds stocks.

Len





Warren Buffet (2003) "Derivatives...
are financial weapons of mass destruction... represent mega-catastrophic risk... can trigger serious systemic problems... are the result of huge-scale fraud... are like hell, easy to enter and impossible to exit"