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Bruce Brown asks:

That's impressive considering Intel's 29 year return. Or 19 year return. Or 9 year return. Or 9 month return - 78% by the way. ;-)

In Response to Db's comment, By the same token, my profits in cyclical stocks - such as semiconductors - are far superior to what they would be if I were simply to hold them throughout.

So, it got me curious. Just what has the CAGR (Compounded Annual Growth Rate) for INTC, given certain time frames, been?
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Stop for a second and write down what you think the CAGR has been for INTC since its IPO date, again 20 years ago, and again 10 years ago.
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Seriously, write down an educated guess. This is the long standing King of the techs since 1/7/72.
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I am putting in the extra lines so that you all will have to scroll down, making it a little more difficult to cheat.
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Assuming a trader is in the 39% tax bracket, because of taxes they only carry over 61% of their profits (after commissions) each year for their own CAGR. The trader then must attain a return that is 1.64 ($100/$61)X the return of the Long Term Buy and Never Sell.

For clarification, the $100 is profit before taxes, and the $61 is profit after taxes.
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OK, enough of the irritating DOTS already!!! Here we go
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Of course all prices are split adjusted. Price as of today is 131 3/4.

IPO date = 1/7/72
Price = 1/32
Years = 28.58
CAGR = 33.87%

Date = 6/27/80 (Closest Friday, the 29th was a Sunday)
Price = 11/16
Years = 20
CAGR = 30.05%

Date = 6/29/90
Price = 2 15/16
Years = 10
CAGR = 46.28%

The CAGR for the last ten years is about what I expected, but the other two time frames are definitely not as high as I would have expected.

I believe I remember BB saying that Intel became a Gorilla in the early 80's. What would a trader have to annualize to beat it?

30.05% (from 1980)* 1.64 = 49.3% (After Taxes for Trader)

Just for giggles, take Intel in 1990, then:

46.25% * 1.64 = 75.85% (After taxes for Trader)


I have only been a disciplined trader for roughly a year and a half (Have invested for 4 1/2), and it has been during what has been one of the strongest bull run ups in history. So, that would also lead to no proof as to whether trading can attain better results than GG. That being said, it just does not seem to be an unachievable task. My own personal CAGR since early '96 after all taxes and expenses beats that of INTC since '90.

I know that Bruce adds to his Gorillas often, so this may make it difficult to determine the true CAGR, I am not sure about Mike. I understand this is personal, but could you give a ballpark number on how long you have been GG'ing, and how much of GG that you attribute to your LT results? I am sure you were both doing your own versions of GG before the approach became known.

I do not present this as an argument that Trading is better than the GG approach. None of our results would be anywhere near scientific. Trading can not be drawn and quartered to be measured up as easily as GG can. It is safe to say that Trading has so many more variables to throw into the equation to determine what a trader is, and how one becomes successful with it.

Curiousity got the better of me when Bruce mentioned INTC and wondered what the LT returns have been on it.

I have been a lurker, so I wanted to add thanks to all of you on this board that provide so much of your time to get your very insightful GG information out to others for sharing, and building upon.

Prestone
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