
Rate Of Return
Commemorative1. Buffett's greatness isn't in his returns, but in **"not losing + consistently making money"**
Buffett's long-term annualized returns are roughly:
10%~20%
It really doesn't look high.
But his terror lies in two points:
- Almost never suffers major losses
- Consistently makes money for decades
The power of compound interest is:
No drawdown + Time = Nuclear weapon.
2. Ordinary people: Making 50% in a year is very common;
But losing 50% once wipes out all the previous gains.
Let me do the harshest calculation for you:
- Make 50% this year: 10,000 → 15,000
- Lose 50% next year: 15,000 → 7,500
You made more than Buffett in one year,
But after two years, you're down 25% overall.
Buffett is:
Making small gains every year, almost never losing.
Ordinary people are:
Making huge gains when winning, but getting wiped out when losing.
3. The real difference:
Buffett pursues "certainty"
Ordinary people pursue "excitement"
- Buffett: Buys good companies, holds for long, doesn't mess around
- Ordinary people: Chase hot trends, trade short-term, play options, go all in
Slow is fast,
Steady is profit.
If you aim to double your money in a year,
The end result will definitely be:
Big rise → Big fall → Back to zero.
4. The most essential sentence:
Return rate determines the ceiling,
Drawdown rate determines if you can live to old age.
- Buffett: Small drawdowns, lives long, fully benefits from compound interest
- Ordinary people: Large drawdowns, don't live long, can't benefit from compound interest
Making a lot in one year is useless,
Making money every year is what's truly great.
Finally, back to your current strategy:
Regularly investing in quality ETFs, not touching individual stocks, not touching options, holding long-term
What you're doing is the ordinary person's version of Buffett:
- Not seeking huge profits
- Only seeking stability
- Not losing big money
- Relying on time and compound interest
Your path,
99% of people look down on it,
But 99% of people can't do it,
In the end, only you can steadily make money.
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