The ultimate buy and hold strategy: 2018 edition

Nothing wrong with looking backwards. 100% of stock purchases are based on what we know about the past.

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From 2000 to 2018, sp500 only increased 93%, even lower than unleveraged median home increase of 110% for California.

However, from 1970 to 2000, sp500 slighlty beats California median home price. 14 times for stocks and 10 times for CA median home.

So even for the past 48 years, a 20% down purchase of a California median house is 3.5 times better than sp500. Silicon Valley would be even better.

Is his math totally wrong? From January 1970 to January 2018, Sp500 total return with dividend reinvestment is only 30 times. So 100k would become 3M today. How did he get 12M?

Read the article.

Without dividend reinvestment, total return is 30 times.

With dividend reinvestment, total return did become 124 times. If you also do rental income reimvestment, housing still greatly beats sp500 over the last 48 years.

It’s amazing that a simple dividend reinvestment scheme can make a 4 times difference over 48 years.

“For the past 48 calendar years, from 1970 through 2017, the S&P 500 compounded at 10.5%. An initial investment of $100,000 would have grown to $12.2 million.”

Huh? The charts are for illustrating why historical comparison is bad. Stay too long in Sunset? You’re mixing with the wrong crowd.

In case you don’t understand, based on is not the same as extrapolate :wink: Just to be sure, you’re not from UCLA, right?

If you want to diss @sfdragonboy then just be open about it. No need to 放冷箭 :rofl:

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Ai yo yo… This is a terrible comparison. Houses need to be maintained, asset need to be replaced, need to pay property tax, HOAs if applicable, remodel, repairs, gardening…

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Hey, you’re putting words in my mouth! This is called character assassination :thinking:
一箭双鵰

@bagb is so clueless… :rofl:

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Um… sure… :rofl:

I can see why you are single…

Ok… looks like my strategy backfired… :laughing:

Problem with bringing up past winners like Apple is that of course what’s the Apple for the next 20 years?

The autbor’s portfolio has very high probability of doing well in the next 30 years. For it to suck that means the American economy must also suck. It can happen but probably not.

BRK beats SP500, it is well known. As long as buffet’s team, esp WB & CM replacement, are performing equally good, we are fine with BRK.B for continuous investment for a long hold.

I have some precious clues but you are sold out to Wall Street propaganda. My clue might be better than Shiller

Hey, I’m not sold out to anything! :stuck_out_tongue_closed_eyes:

Here’s the annual median home price for the state of California.

Good years:
1971-1981, about 300% appreciation (super inflation years?)
1985-1989, 68% appreciation (Reagan Tax Cut and Deregulation?)
1997-2004, 140% apprecition (Interest rate decline and dot com boom?)

Bad years:
1990-1996: 9% depreciation in 6 years (why?)
1984: 0.1% depreciation

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In 1970, California median home price is the same as US. But in 2004, California median is 2.4 times US median.

Also national home price has a much more smooth and steady growth, lacks the super growth years in California. I suspect those super growth years could be preceded by major land use regulations.

Surprisingly even national median price with 20% down would beat sp500 without dividend reinvestment in the last 48 years, 50 vs 30. Assuming rental income minus all the ITI, maintenance and PM etc matches SP500 dividend, which is a pretty reasonable assumption. Is Shiller wrong and am I right?:rofl:

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In 1970, is California regarded as today’s Phoenix and Northeast and even Detroit was much better than us?