I wonder what all the billionaires think about all the new stock market investors

danm

Chris - play around with the numbers in a spreadsheet if you really want to learn

you will see that manually adding rows, 100 @ 8% groth after 10 years is 215.90

Which is same as saying 100*8%^10 = 215.90


so we know that End Number = Start Number*Growth%^years

you then need to solve/rearrange that equation to find the growth % number which mathulsian has shown you how to do above. (End number / Start number)^(1/years)

Eco_Miser

CreditCardChris wrote: »

For all the billionaires who either bought stock 50 years ago or owned stock via a company they founded, I imagine what they think about the new generation buying now for the first time.

Most billionaires made their money by running a successful business, not by buying shares on the stock market. (Ok, Buffett's business was buying shares)

CreditCardChris wrote: »

For example if you invested 50 years ago you'd be sitting on a pure growth return of 5054% (100.9% a year on average!!) which means if the S&P increases just 5% this year, that 5045% becomes 5313%, a 5% increase for us is a whopping 268% for them...

That is not how percentages work. Everyone gets the same 5% increase in the pie, some have bigger slices to start with, so bigger absolute gains. They also get bigger absolute losses when prices go the other way.

Reaper

CreditCardChris wrote: »

I wonder if those billionaires secretly think we're absolutely nuts investing now in 2020 when they bought in 1970 or whatever

You are forgetting the 1970s was also a period of high inflation, exceeding 25% at its peak.

firestone

CreditCardChris wrote: »

Oh right that makes sense.

And no I'm not trolling, I have many posts on this forum trying to learn about investing and stuff. So what's the correct way to calculate the proper average?

you could search online for lump sum calculators which let you pick your starting amount add a term and % rate and usually compound as well to have a play with (used to be a simple Ones on the this is money site and money facts among many)

mark13

Is there a billionaire here who could answer the post ?

Thrugelmir

Eco_Miser wrote: »

Most billionaires made their money by running a successful business, not by buying shares on the stock market. (Ok, Buffett's business was buying shares)

Buffett was an entrepreneur. In a similar mould to Alan Sugar. His father was a stockbroker. Berkshire Hathaway started life as a textile company......

fiisch

I think your post essentially boils down to "hindsight is a wonderful thing".

But who, without the benefits of the Internet and easy access to a wealth of knowledge, would have known to invest?! I only started investing a couple of years ago (started out with MoneyFarm, then moved to Vanguard Lifestrategy 100 as so many seem to have done!) thanks to forums such as these.

Had it not been for MSE, I would probably still be thinking about my income/expenditure in monthly terms (I've had a payrise, so now I can buy a faster car mentality).

It's hard not to get carried away as a junior investor plugging nominal amounts into a compound interest calculator and seeing where it'll be in 30+ years time (I'm 33 so potentially could stay invested for this amount of time). It's nice to think my £250 / month will make a septillionaire eventually, but I'll take a positive return that beats a standard savings account interest rate!

Username999

It's hard not to get carried away as a junior investor plugging nominal amounts into a compound interest calculator and seeing where it'll be in 30+ years time (I'm 33 so potentially could stay invested for this amount of time). It's nice to think my £250 / month will make a septillionaire eventually, but I'll take a positive return that beats a standard savings account interest rate!

So many people were saying similar things in 1999.
I can almost guarantee a black swan event in the time you plan to be invested.
But don't worry, "they always recover".

GL

Apodemus

fiisch wrote: »

But who, without the benefits of the Internet and easy access to a wealth of knowledge, would have known to invest?!

The internet does indeed make the wide world of knowledge easily accessible, but before it came along, knowledge was attainable and people did invest!

Personally, I learned from watching my granny keeping track of her share purchases/sales and her dividends, all of which she entered in a big ledger! Followed up by books in a dark corner of a library and the back pages of the FT.

fiisch

Username999 wrote: »

So many people were saying similar things in 1999.
I can almost guarantee a black swan event in the time you plan to be invested.
But don't worry, "they always recover".

GL

It might make me somewhat unpopular, but I'd welcome a black swan event about now..! All those lovely cheap discounted units...

That said, I like to think I have a maverick attitude to risk and would have no worries holding firm during a crash, but I don't think that can be said with any conviction until you've lived (survived?) through one...