I Made a 730% Annualized Profit on Amazon Stock. It Was My Worst Investing Mistake Ever.
published 26.07.2020 16:05
Theoretically, an investor could earn triple-digit annual returns by banking single-digit gains on a different stock every week, but as a practical matter, your chances of sustaining a winning streak like that are near zero.
On an annualized basis, that put the return on my Amazon stock at a staggering 730%.
On the other hand, since my average holding period was not even five calendar days, I could have theoretically compounded this return about 84 times in a year.
Earlier in the year, Amazon stock had traded as high as the upper $50s.
By contrast, if you buy a portfolio of companies with massive growth potential, holding for many years -- or even decades -- the gains from a few big winners (like Amazon) could power market-beating returns.