Comment: It's not complicated: The

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It's not complicated: The

It's not complicated: The best way to make money is to buy an incredible business at a great price. If you'd have put 10k into Apple in 2003 you'd have a half a million dollars now... Apple's 10yr average return for the last decade is somewhere around 40% per year, 40% means (compounding) you double your money roughly every 2 years.

Interestingly most people with investments have probably actually held apple for the last decade... but the problem its returns have been severely muted because it has been held within a mutual fund. The average mutual fund has around 140 businesses. Which means even if a business doubles in size every year its impact on your overall portfolio is very limited. If that wasn't bad enough, any business that over-performs and begins to occupy too great a percentage of the portfolio is cut down in size (partially sold) and the funds redistributed into lesser performing businesses, which is like benching Michael Jordan for making too many shots. If they would have just invested a meaningful amount into that impressive business (apple) and let the earnings compound they would have hit over 40% annual average over the past decade. And there are dozens of other well-known impressive businesses that have had distinctly identifiable competitive edges that have resulted in decade long periods of over 20% returns. Investing in hyper-diversified mutual funds (the way most people are invested) has severely curtailed the gains people have experienced even while owning incredible businesses.
*exit soapbox