I read somewhere that Buffett, while working for Graham Partners, managed over his 5 year stint at the firm to grow his little grubstake of $9800 into $140,000 (or in today's currency about $80,000 into $1,000,000!), starting at around the age of 21.
This amounts to an annual compounded return of about 70% averaged out over 5 years.
It is generally conceded that Buffett used the 'cigar-butt' technique to achieve this. But it is still a mystery as to exactly which issues (historically) he managed to do this with.
My question is:
- Is this still possible in today's efficient market?
- Was it possible at all in the 1950's?
- Is the ASX volatile enough to garner these kind of returns? (For that matter, is the ASX more or less volatile than other bourses?)