50% returns on small amounts?

[pig4bill]

Glad to see you keep up your batting average of being wrong. [img]/images/graemlins/smile.gif[/img]

[DcifrThs]

i have no idea about these 50% average annual return things.

i'm very seriously impressed with 30% and 20% as well provided the information ratio isn't ludicrously low.

i'm most impressed with any kind of returns on a 1.5 or higher ratio. in that case, you can use leverage in many ways to increase your returns and really have a lot of room in terms of costs to do so.

i keep hearing warren buffet said that 50% is easy...can anybody link me to his speech where he mentions this?

or what kind of things do you have to do? is it all stock picking via value investing?

Barron

[stinkypete]

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i'm most impressed with any kind of returns on a 1.5 or higher ratio. in that case, you can use leverage in many ways to increase your returns and really have a lot of room in terms of costs to do so.

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does anyone have a record of achieving ratios that high over long periods of time?


if i could do 50% with a 30% standard deviation (which should be about right with that information ratio), i'd retire right now [img]/images/graemlins/laugh.gif[/img]

[DesertCat]

Buffett said he could do 50% a year with a $1m portfolio, guaranteed. He never said you could do it. I once averaged 42% a year after tax (roughly 50%) for almost four years straight. All boring value stocks and arbitrage deals. But I dont think I've been doing as well since. My portfolio is much bigger, I dont work as hard and I've found other distractions now that my life doesnt depend on my portfolios performance any more. I dont even calculate my performance as long as my portfolio is going up.

[kimchi]

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I think the more you concentrate your investments, the higher the chance of getting 50% return would be, but obv at the same time the chance of losing would equally increase. If money managers could get you 50% return why would they waste theri time with you and not get 50% on their own money year after year DUCY?

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Just because you know how to get 50% per year does not mean you have the funds to fully take advantage of that 50% per year. You can invest your own money, and after you run out of your own money, continue to invest others for a fee. DUCY?

Not everyone who can beat the market is rich, and not everyone who is rich can beat the market.

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LOL.... how famour is Peter Lynch (and how [censored] rich) and he didnt beatthe market for 50%.... if you could beat the market for 50% even for a few years before your portfolio grows too bg you be set and then trade ur own money no?

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No, even if you scrap together $10,000 (a lot of money for most people -- maybe not you) it will take years of 50% returns before that money becomes significant enough to move the market -- in the mean time you could manage a fund (kind of like peter lynch did) to make more money as you go along.

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If you have a portfolio of $10K, then your fixed costs are going to kill much your profits.

I find all these % stats pretty unhelpful when comparing performance. I could tell you a simple way to get 50% annual returns - as long as you can weather 90% drawdowns and a ROR approaching 1.

[Ganjasaurus Rex]

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I think the more you concentrate your investments, the higher the chance of getting 50% return would be, but obv at the same time the chance of losing would equally increase.

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o rly? does that mean that the converse is true and that diversification reduces your volatility? i think you're onto something groundbreaking here...

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Well, you are welcome..... [img]/images/graemlins/wink.gif[/img]

I figured OP didn't realize that investing in a broad index in a developed country or something like that 50% return would not be very likely. And the only way to get 50% returns would be by taking big risks...

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First, thank you and the others for the responses. They were all informative.

Second, I understand it's a big risk. I assumed that anything with higher profits equals higher variance. I have about $30k that i was going to put into my less risky retirement portfolio because i didn't know what else to do with it, but i wouldn't mind gambooling it up since its extraneous funds.

That is why i asked the question to begin with. So again, my question is "what kind of money manager can do this?" Any names? I don't much care where they live, as i travel all over.

[spino1i]

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i have no idea about these 50% average annual return things.

i'm very seriously impressed with 30% and 20% as well provided the information ratio isn't ludicrously low.

i'm most impressed with any kind of returns on a 1.5 or higher ratio. in that case, you can use leverage in many ways to increase your returns and really have a lot of room in terms of costs to do so.

i keep hearing warren buffet said that 50% is easy...can anybody link me to his speech where he mentions this?

or what kind of things do you have to do? is it all stock picking via value investing?

Barron

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22.5% in 5 months (starting with 80k). Im on track for 50% this year. And keep in mind I sucked at stock trading when I started and im a hell of a lot better at it now.

This, however, includes a lot of arb'ing and daytrading. Its not your traditional pick some stocks and long them. That would only net me 20%/year at best.

Also keep in mind I have no respect what so ever for risk, I could always go get a job and poker makes me a ton of money as well. At one point I was so confident a specific stock was going to go up I put 100k in it (more than my whole net worth at the time). Fortunately it went up.

Wheres my cookie?

[skindog]

I've averaged ~45% r.o.r. for 3 years, and like other posters have mentioned, I've done it by concentrating my money in a few stocks I hand picked. I've been fortunate because the market has realized my picks' value a little after I have.

I didn't do any daytrading, only periodic trading based on my sentiments about valuation, and some covered call writing when calls seemed profitable. Leverage wasn't factored into any of my returns, I'm only recently beginning to use it.

I could go into my stock picking methodology, but I think it would be pretty pointless, since a lot of it is unexplainable and, even if it was, my results are probably all variance! I guess I'll see in 5 years.

[ahnuld]

I really really dont think 50% returns are sustainable. Its like the 10pt/bb winrate. Sure some guys can run there for 40 to even 70k hands but put it over any decent sample and its basically impossible expect for honestly 5-6 guys in the world. The stock market cannot allow you to see the long run so this argument is pretty pointless. Its very possible DCs gains during the years were due to positive variance and his real EV was 25% gains. Im not saying it eas or wasnt, im just saying if poker has taught me anything its to not be so results oriented if the decision was an intelligent one.

[DcifrThs]

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i'm most impressed with any kind of returns on a 1.5 or higher ratio. in that case, you can use leverage in many ways to increase your returns and really have a lot of room in terms of costs to do so.

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does anyone have a record of achieving ratios that high over long periods of time?

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yes. desk quants/desk analytics books of people i've spoken with have done this. one guy is the FI desk analytics guy at lehman and the other is the structured products desk quant. the FI guy has generated nothing impressive in terms of excess returns: 13%, but very impressive at only 5% vol (IR of 2.6) for 2 years now. that is pretty sick.

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if i could do 50% with a 30% standard deviation (which should be about right with that information ratio), i'd retire right now [img]/images/graemlins/laugh.gif[/img]

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yea but the ability to get higher and higher ratios with higher returns i think diminishes. typically the highest ratios i've seen are on fairly low vol portfolio's...but, there is no theoreticall basis for high returns to necessarily have lower ratios beyond capitalism.

Barron