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lentinman

09/18/05 3:22 PM

#22725 RE: cleverrox #22724

Clever:

You know me. I have to play with numbers. Taking your numbers (and assuming no additional added revenues), what do you (and I mean "you" as in anyone reading this) think the overall return is??

2000 - (90%)
2001 - 67%
2002 - 35%
2003 - 50%
2004 - 26%
2005 - 120% YTD

I ask this because it is a GREAT object lesson. Someone will calculate, -90 + 67 + 35 + 50 + 26 + 120 = +208.... +208 / 6 years = +35% per year. Not bad.

Of course, that is horrendous math, but some people think that way and that is partly why you have to question anything that anyone says. Not really question it, but rather ignore it. There are many things that one person might be factoring in and another person is not. Maybe a person only counts the investments and doesn't factor in the cash. Maybe someone doesn't factor in trading costs. Maybe someone isn't counting taxes, while another one is. Maybe someone is only in the market for short periods and is annualizing it. Who knows? Who cares?

But, the answer to the above is -6% / 6 years = -1% per year as opposed to +35% per year.

$1,000 invested is worth $100 after year 1 based on a 90% loss.

Year 1 = $100
Year 2 = $167
Year 3 = $225
Year 4 = $338
Year 5 = $426
Year 6 = $937 ($63 below the original investment)

Len






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herplacebytheriver

09/18/05 6:20 PM

#22734 RE: cleverrox #22724

Hi all,I am long time lurker from RB times.
Would like to thank you for your posts,for broadening my views not only in investing but almost on the level of philosophy of life and at the end thanks for civilized and cultivated atmosphere not to forget humor very often.
When I read 200% posts feel like writting you my story but in the end it will be only for catharsic purposes and interesting only for me.Just that after all losing I still live in same daydreams and self confidence.
The only thing is that I have learned to leave DD to experts:
Bobwins and hweb ...,wait to see who will have monster numbers,then wait for the dip,possibly buy on 20 slostohastic and than sell only part on 80 slowstohastic.

May all of you have steady sequential portfolio increases.
Greetings from Croatia,
Zdravko
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researcher59

09/18/05 9:35 PM

#22740 RE: cleverrox #22724

cleverox: The more aggressive you are the greater the potential for huge returns, especially when you have your entire investment portfolio in just one or a very few stocks. Of course the risks are much greater too. I've currently got 70 stocks in my portfolio, so it's much more difficult to get really great returns, though I am heavily weighted in some issues, with the top 12 accounting for nearly 50% of my total amount invested. And I've gotten much better returns since I went full time late in 2002. Research really does payoff, and so does getting ideas and leads from this message board.

I've been investing for 20 years, and only twice exceeded 100% returns, 105% in 1998, and 131% in 2003. In three other years I exceeded 50%. I've had only three years of negative returns, but one of those years was severe. In 2002, in the midst of the bear market, especially in the tech sector, I managed to lose 61%. Never did I think I could have such a terrible year. Worldcom and Flextronics both hurt my portfolio badly, as did many other tech stocks. In 2000 I lost 30%, but that was quite acceptable to me given the 39% decline in the Nasdaq. In 2001 I escaped the carnage in the tech sector with a positive return of 28% versus a loss of 21% for the Nasdaq. A big bet on ESST, the emerging leader in DVD chips, made my year with the stock up a few 100%, enough to offset losses I suffered in other tech stocks.

This year I've been heavily in oil and gas, so having another excellent year by my standards, up 69% YTD. Good luck. I don't doubt that 200%+ returns are possible in good years with a narrowly focussed, aggressively managed and modestly sized portfolio, especially by sticking to stocks discussed on this message board. However bad years are possible too, especially in a bear market, so the long term annualized return could be much less.