What if?
What if you were a professional stock market participant. And you spent the entire calendar year in proper due diligence so that on the first trading day of the next year you picked one and only one stock to hold for the next year. Limiting this to just the S&P 500 stocks you would have to winnow through about 10 a week. Two per day. This seems a perfectly reasonable task. I think almost anyone could get the list down to 10 or so even if you couldn’t pick one.
In 1983 I would have picked Tandy Computers as a 6 year old. It was the only computer I knew about and it was everywhere. Picking Nvidia in 2020 was a no brainer. I did buy Apple in 2002 (or 2003.) Sun Microsystems, Dell, Qualcomm, where all obvious at the time as well. Picking Coca Cola in the year it released “New Coke” I think would have seemed like a dumb idea. I still don’t have any idea how KO was up that year. So maybe out of 45 years, I could have gotten six. Family Dollar in 2008, no. Priceline in 2009, a company I still don’t understand how it even exists, no.
Here are the top performers every year since 1980.
But, my question is what sort of return would you gotten if you could figure out what the best stock to buy was? Let’s say you started with $1000 (about $4000 inflation adjusted.)
Try to guess.
The answer is below the disclaimer below.
Of course, this is a ludicrous. The Mean annual return (1980–2025 YTD) is 218.04%! You’d be buying entire companies very quickly just look at the returns in that list. You wouldn’t be able to get fills either after just a few years.
But, when you look at returns online keep these figures in your mind. And, if you expanded this idea to any stock and included options the returns would get absurd geometrically faster. When you look at bitcoin returns they pale in comparison to the returns in this thought experiment.
As always, if you think there are spelling errors update your dictionary to the latest version. Happy speculation!
— AJ
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Our charts are updated everyday as new data becomes available and are available via subscription. This is because the costs of doing this analysis across 15,000 US-listed securities is not cheap. Compute is not cheap.
Neither is the effort required to find these plays before they move. If you do nothing but read all day, every day, you can beat the market. But we prefer to sleep in and therefor use code.
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Total return would be $4.6 × 10²⁰ (≈ $455,000,000,000,000,000,000)