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As someone that works at an investment bank, your comment makes my head hurt. The facts you cited aren't my facts; stocks and bonds are indexed to a benchmark
by 300bps 13y ago
As someone that works at an investment bank, your comment makes my head hurt.
The facts you cited aren't my facts; stocks and bonds are indexed to a benchmark made up of their peers. Matching the index is expected, beating it is great and underperforming it is really bad. For Apple and Microsoft, their peers are in the NASDAQ index so that is the benchmark by which they are judged.
Microsoft being up 37% in contrast to its benchmark being up 28% is not "a bit more than the average". It is beating its benchmark by 32% which is an incredibly good performance. Likewise, Apple underperformed its benchmark horrifically.
Think about it this way - $100 invested that returns 37% compounded growth over 8 years is now $1,240.98. However, $100 invested that returns 28% compounded growth over 8 years is now $720.58. Hopefully you can see why your downplaying of Microsoft's accomplishment seems a little silly. Oh, and the same $100 invested in Apple over 8 years would now be $69.88.
- anonymoushn 13y agoAre percentages of percentages a useful thing to talk about? If the index was flat and MSFT was up 1%, I wouldn't learn much from "Microsoft is beating its benchmark by infinity%!"
- 001sky 13y agoplot MSFT, AAPL, an SP500 for 24m They are about the same, all showing mean reversion.
- qq66 13y agoWhy are you using one year extrapolated to eight? For an eight year comparison you should compare investing $100 in the two stocks in 2005.