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This 2020 Business Insider article claims that author and stock-trader, Mark Minervini made a

compounded total return of 33,554% from 1994 to 1999, which equates to roughly 220% a year

This seems exaggerated. Is it true?

Oddthinking
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Stupid_Intern
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  • looks like the answer is in the book "Stock Market Wizards: Interviews with America's Top Stock Traders" and the full story is more complicated – Avery Oct 02 '21 at 11:02
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    Not impossible if he was a VC during that dot-com boom era (i.e. put money in before IPO etc.) – Fizz Oct 02 '21 at 18:47
  • Using percentages yields Really Big Numbers that make it harder for the human brain to process them. Put in sensible numbers, the claim is equivalent to that he multiplied his money by 335, meaning that in his (geometric) average year, he multiplied his money by 3.2. He outperformed the S&P by a factor of about 100. So all he would need to do to get those results would be to pick bets that have a total chance of succeeding 1% of the time, and get lucky. Are there more than 100 traders making bets of this level of risk? I think there are. – Acccumulation Oct 04 '21 at 05:27
  • @Fizz You don't need to be a VC, just have really high beta and be lucky. With derivatives with high enough delta, you can get the sufficient beta from the normal stock market. – Acccumulation Oct 04 '21 at 05:30
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    With millions of people trading in stocks, it will never be difficult to find a random outlier with extreme luck. It does not mean that the trader is very skilful, just that he was very lucky with his investement. – Tor-Einar Jarnbjo Oct 04 '21 at 08:13
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    What did he lose after 1999? – user253751 Oct 04 '21 at 12:11

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