Just a Little Bit

Margins are very thin and not just with it being the Bezo's opportunity. In the 8 years from the start of 2017 to the end of 2024, the SPX compounded at 14.85% leading to 1 dollar becoming 3.03 dollars. The SPX is now down 13.54% after Liberation day and if you take away that performance from the previous 8 years, you will be left with 2.62 for a CAGR of 12.79% return. Nearly 2 percent of performance a year for 8 years wiped away. You still have to build that lead for the inevitable downswings at times. SPX had 5 days of >5% loss in 2008 and 2020. We have one this year, but Thursday was a 4.8%. All arbitrary, but inside the human minds, there are certain hurdles that mark milestones. Larry Fink claims in his annual letter that in a 30 year, the average pension outperforms a 401k by 0.5%. Compounded over 30 years, you will get returns of 17.45x instead of 19.99x assumming a 10% vs. 10.50% rate leading to 14.5% less in the retirement fund or 9 years of retirement. Charlie Munger always illustrated with 15% compounding for 30 years and paying 35% tax once or 15% each year and taxed 35% before investing again. It's the difference of 13.3% vs 9.75% return and over 30 years, what 3.5% does is a lot. Little things. On the Margin. A little late or a little slow.