New Milestone – 30% CAGR

Peter Lynch is one the most famous investors in history. He outperformed Warren Buffett by averaging a 29.2% annual return from 1977 to 1990. In addition to other investment books and videos, I read Lynch’s books and I watched his videos. I was amazed by his number. At the time, it seemed impossible to reach Warren Buffett’s number, which is approximately 20%, let alone Lynch’s 29.2%.

In a way, I cannot believe that I reached that number.

The portfolio has been on gang busters in the past couple of years. Today, it hit a new milestone. It hit 30.3% CAGR (compound annual growth rate) or average annual ROI (return on investment). This is for the period from July 2008 until today, October 7th, 2020. Again, this does not mean that the portfolio grew by 30.3% every year. Some years were flat or negative. Some years were more than 30.3%.

As I have mentioned before, stocks do not go in a straight line. Next year, my CAGR may drop…or it might go up. Who knows. But the secret is to focus on the companies’ business metrics, not the stock prices and if the business metrics are doing well, the stocks will also do well.