This will what happened if it is compounded at 4% with the same 5,000

Compounding RM 5,000 at 4% p.a.
Year ** Portfolio value RM
1 ** 5,000
10 ** 7,401
15 ** 9,005
20 ** 10,956
25 ** 13,329
30 ** 16,217
35 ** 19,730
40 ** 24,005
45 ** 29,206
50 ** 35,533

If you are 24 years old now, waking up at 74 years young, remembering you supposed to have 5 million only to found out that you get 35,533.... how will you feel ? 😅

The difference under promise over deliver....and live long enough.....compounding it for sure for a long time.....

I find that Warren Buffett is really much more down to earth.

In his 1962 letter, Buffett shared the story of Queen Isabella of Spain sponsoring Christopher Columbus’s voyage in 1492 to find a “new world” at a cost of around US$ 30,000. Buffett called it a low-compound investment, as the same money invested at 4% compounded annually would have amounted to something like US$ 2 trillion by 1962 (or 470 years later).

I'm gonna extract some information from iCap 2023 Annual Report (page 11)

Compounding RM 5,000 at 15% p.a.
Year ** Portfolio value RM
1 ** 5,000
10 ** 20,228
15 ** 40,685
20 ** 81,833
25 ** 164,595
30 ** 331,059
35 ** 665,878
40 ** 1,339,318
45 ** 2,693,846
50 ** 5,418,287

Nothing wrong with the math....only thing it is injecting the idea to hold iCap for 50 years to get 5.4 million by just buying about 2,000 shares today. I understand the context perfectly of his point of do not interrupt compounding process unnecessarily. But we all know the higher the hope, the higher the disappointment when someone can't deliver that high rate without a single year of money losing for 50 years.

If you dream to be a millionaire -- you will know why path is more realistic. 😁

@i3gambler : Good to do your own calculation and arrive your own conclusions....✌✌

@Patient Investor....it will be immaterially affecting the views of EPF vs iCap with same amount of money invested regularly but with different risk: EPF guarantee no loss of money with minimum 2.5% dividend and it's written in the law and average of 6% in past 10 years. While iCap is making a lot promises of Low Risk High Return. How to translate this into numbers? I wish we can get an answer.

BTW, Dividend received in 2013 will be 17,372 and 2022 will be 62,996 = 80,836 based on above accumulated quantity....added back to my calculation the gap is still quite far.

How one want to allocate their hard earned money is very personal. I am only giving my views for other think about. Nobody is certain of anything except death and taxes. Who knows one day TTB is really able to delivery CAGR 15% in the next 20 years? Who knows? Between hope and a bit more certain, how will we allocate our capital? That's up to the readers in this forum to decide for themselves.

Dollar averaging cost busted!

I'm modelling real life how people will put their money to work rather than calculating cumulative return since inception and you put your money only 1 time at the point of inception or IPO....at the end of the day, it's money in our bank that counts not those nice return numbers published in annual report. 😂😂

Okie....I am going to use iCap share price at the end of each of their FY since it's an investor return(not fund manager return -- NAV) and we are going to use the same 36 k per year for 19 years

Year ** Price ** Addition ** Qty share bought
2005 ** 1.08 ** 36,000 ** 33,333
2006 ** 1.46 ** 36,000 ** 24,658
2007 ** 2.62 ** 36,000 ** 13,740
2008 ** 1.39 ** 36,000 ** 25,899
2009 ** 1.74 ** 36,000 ** 20, 690
2010 ** 2.09 ** 36,000 ** 17,225
2011 ** 2.05 ** 36,000 ** 17,561
2012 ** 2.37 ** 36,000 ** 15,190
2013 ** 2.47 ** 36,000 ** 14,575
2014 ** 2.4 ** 36,000 ** 15,000
2015 ** 2.37 ** 36,000 ** 15,190
2016 ** 2.55 ** 36,000 ** 14,118
2017 ** 2.92 ** 36,000 ** 12,329
2018 ** 2.54 ** 36,000 ** 14,173
2019 ** 2.47 ** 36,000 ** 14,575
2020 ** 2.19 ** 36,000 ** 16,438
2021 ** 2.52 ** 36,000 ** 14,286
2022 ** 2.25 ** 36,000 ** 16,000
2023/May ** 2.32 * 36,000 * 15,517

Total accumulated quantity 330,497
Value at 4/10/2023 $ 2.64 = 872,511
Assume it's zero discount at NAV of 3.53 will be valued at 1.1 million

It's still kalah to EPF....for 19 years....EPF will work out to be 1.28 million with the same 36 k per year addition.

If someone earning 10 k per month, 22% mandatory contribution will be 2.2 k + 0.8 k personal top up will get you to this 3k target.

I forgot about the 36 k annual addition in my calculation that arrived at 894 k

Just a correction ya...the balance at year 2022 498 k with annual addition 36 k for next 10 years compounded at 6%...by year 2032 will be 1.39 million.

Aspiration and reality are 2 different things......that is why we need to be humble in the market

For many people always thinking fast money....slow is actually fast....everybody understand positive compounding effects but it's just not sexy or macho enough.....I have seen many people pouring money into something that they always thinking annual compounding 15% consecutively for 20 years.....Even icap in 2023 annual report using 15% compounding rate.....subtly giving people impression he can do it at that rate

No problem bro -- I still have HP12c 25th Anniversary Edition.....for memory keeping sake.....🤣🤣

Let's see icap can give us that kind of return after 20 years bo......240 installments x 3 k per month.

Since we don't have some so nice like PNB ASB....EPF is something closer
Year***Return***Addition***Balance at year end
2013**6.35%**36,000**38,286
2014**6.75%**36,000**79,300
2015**6.40%**36,000*122,679
2016**5.70%**36,000**167,724
2017**6.90%**36,000**217,781
2018**6.15%**36,000**269,389
2019**5.45%**36,000*322,032
2020**5.2%**36,000**376,650
2021**6.1%**36,000**437,821
2022**5.2%36,000**498,461

Average return 6.02%, std dev 0.61 Sharpe ratio = 0.87 using US risk free 5.49% for iCap calculation earlier.....

Assume 6% return from year 2022, next 10 years compounded at 6% will give us $ 894, 352.

Annual additions 36 k....meaning keep topping up every month of 3 k.....228 installments(19 years x 12 months)

Will get that dek

Adding 36 k every year for 19 years not start with 36 k and no additions😂😂

Honestly, do I dare to do the same with iCapital ? ....... Teng teng....akan datang........close shop for today 😂😂

If I can find such an investment, I will put every penny when I get my paycheck(100% allocation). Assuming, 3k per month, 36 k per year, 19 years compounded with 7% --> 1.57 million 😎

Just that if we can find any investment with sharpe ratio of 1 with 27% deviation, to compensate for the risk, Expected return should be 32%.

it can swing either way from mean

volatility means you may get caught if you try to time his NAV and decide timing to buy

otherwise we won't buy iCap despite of the flaw claims.....just try to speak out nia....no angry ya

we are realist....we know as long a return is okay la....but just cannot tahan when someone claim low risk high return...to us it's still high risk okay return la....

So how ??? Good news is not negative....but to argue a low risk and high return case in a finance class....I think I will be same like Bill Gates or Steve Jobs-- a college drop out --- a rich one 😂😂

Thank you for both Cikgu....(7%-5.49%)/27% = 0.055 < 1

I am not saying it's a bad return but just that we should be more humble and tell it as it is.....I would say....dear shareholders, I promise you that you won't suffer permanent capital loss. Hang on to your seat belt when the seas are rough. When it is way too rough out there, we are going to the shore and hide for a couple of days(converting to cash)....when the sea is calmer and others are afraid, we will go out and do a few catches but we might get big fish but sometimes luck is not on our side, we might get a few kembong fish or ikan bilis. 🤣🤣Cheers 🍺🍺

Low risk high return? it's not for the faint hearted for sure.

I want to take 2013 to 2023 again.

Year --- NAV change % -- Cash Level %
2013 --- 16 -- 51
2014 --- -8 -- 63
2015 --- 8 -- 62
2016 --- 11 -- 68
2017 -- 46 -- 54
2018 -- -39 -- 68
2019 -- -5 -- 68
2020 -- -4 -- 50
2021 -- 58 -- 34
2022 -- -20 -- 34
2023 -- 14 -- 30

Average return(Mean) 7%, standard deviation 27%.

Despite of high cash level, volatility is kind of high.

Stripping of the cash, his invested portfolio volatility is even higher.

Looks like no pains no gains, no f**k no son to me....just like the rest of us.

One other thing - there are physical ETFs and also synthetic ETFs...Physical ETFs will really go and buy the index component stocks and will receive dividends. They will also distribute the dividends to investors. Synthetic ETFs may use only swaps and collateral...now I seeing some people shaking heads saying WTF @x!##$ 😡 Nothing is easy in the investing world. Now you see when you really want to execute on such a simple idea got so much more issues. 😂😂

I like financial jungles because it's fair because of 3 big words: Risk Adjusted Return. Welcome to the Hunger Games the moment you have itchy hands want to chase after return higher than FD, Fixed Income, EPF........Are you happy with 3-5% with zero risk(volatility) or 10% return with 20% risk(volatility or variance)?

P.S Not trying to show off but I was crazy enough to try all kind of things......sometimes fingers burnt till unrecognizable but sometimes also got happy endings. Just sharings. Cheers🍺🍺

Ooops....I had better be specific.....ETF and not mutual funds. And there are mutual fund companies simply just blend ETFs and sell it to investors in the name of democratize wealth management industry.....LoL. Caveat Emptor.

iCAP has a tendency of grandstanding trying to create differentiation for the same thing. Forgive the old man....As for the DRP....with enough take up, it will dilute COL ownership over time if COL elected to take cash. That's all the more, 23% ownership in excess of 20% is not a concern to me. They just keep trying to contain COL. 🤐

Not all index funds are created equal.....only US market S&P 500 is probably is an exception. KLCI e.g. depending on your entry timing, buying at the wrong timing is probably going nowhere. So is Singapore, STI and needless to say Hong Kong HSI or HSCEI and etc......Only when a stock market crashed like 40-50%, going for a big swing with index funds will be OK....😎

I would not give specific answer but those want to go by performance-based fees, it should be simple and in absolute return %. No complaints how tough is the stock market environment or you are better than the index.

In the early days of Warren Buffet when we ran fund for his friends, his performance structure was clear: above 6% take 24% in excess of that, below 6% go home empty handed ZERO.....Example let's say one year his fund return 7%. He takes only 1% x 24% = .24%, you get to keep 6.76% of the return. If he losses your money ZERO, if he return 5.99% ZERO for him. He didn't charge entry and exit fees. 😂😂

So need to do the math to determine whether worth it or not. If you can't work out the mechanism or scenario then you don't understand it, if you don't understand it, put the money you don't need to understand it with no capital loss....😂😂

Wah Tiga i.....so firm.....TTB nanti 😭😭

John....give me a hug. Make love, not war. His loyal investors jumped ship ady lo. Else why would they give me RM 1 by accepting 60 sen coins.....Peace forever....👻👻

To be honest to all, I was happy when all are f***g TTB on innovative dividend policy...cause it will create discounts again....enough discounts....that is the time I will be dancing....making deals...evil me😉

I was glad that a few other posts start to talk about NAV, performance and etc....this is important thing for price discovery...we are doing TTB a favor actually educating the public....but with a small fees.....no free lunch in this world ma.😂😂

What matters to me is investors sentiments.....this subject of behavioral finance is important...😂😂 I got a bit of interest

Usually I don't like to use benchmark to see out performance because i find that everyone will say their good points....where got people sell flower don't praise their flower fragrance one.

@dumbMoney. Thanks....time to take the outperformance was an issue....for example, for consistency sake, when Tiga i said from 2013 till 2023, iCap lau si performance, at that point KLSE was at around 1,800 and today is 1400, a drop of 22% and assume that Div Yied of 4%(approximately lah since it's sunday), cummulative of 40% - 22, 18%.. so average about 2%(not CAGR ya...lazy to take out my financial calculator la)...that is why know it was lower but usually I always take 10% either as a discounting factor either do DCF or other things....I am a street fighter ma...not a professional wall street guy

I am a capitalist....my religion is making money....go to the street and fight....take no sides😂😂

So TTB is f×××××g better do better than 10% on the cash he sits on it while waiting to buy low sell high.

@dumb money...assuming Rf is 3 mnths malaysia treasury bill of 3.15%, beta of 1(I just assume but didn't run the correlation) expected market return ....hmm a bit of problem with KLSE it's pretty bad actully but for argument sake...it's 10%...so max cost of equity is about 10% max. But in reality is lower...lazy to go back to my Portfolio class. I was never a smart student. 😴

Then resell 1 Ringgit for 75 sen.....make my day ... buy more moon cakes....cheer guys.

There are just really smart people wanna hand you a 1 Ringgit note by accepting 60 sen. I am gladly shaking hands with those smart people, making deals...the more the merrier.

Discounts is a welcome thing is you want to buy I wish it's 80% discounts. dumb money brought up a good reminder reversion to mean someday when the sentiments turn, we don't need a parity just lesser discounts ady make money.