Magic Ball 72

magic ball 72 : Magic dies with the death of wonderment. Years of suppression by the subconscious of our natural appetite for wonder can encrust our eyes with a scaly sheath which blinds us from beholding with awe and wonder, the magic which surrounds us.We thought it best to herald the 2014 year by reintroducing magic into investment portfolio crafting.A mental math shorthand has lingered on earth which you can use for calculating years required for doubling-your-money at a given annual return, or annual return required for doubling-your-money over a given number of years.

The rule-of-72 is condensed from geometric progression computation formulas which our laity may find complex. It may be one reason why many are simply astounded by how Warren Buffett mentally calculates annual yields required to compound the target return he seeks.

Here’s the “magic ball” 72 formula :

(a) Years to double = 72 / Annual Return Rate; or
(b) Annual Return Rate= 72 / Years to double.

Our patron, WK Gahn has used the Magic Ball 72 as a quick means for determining stock selection for its portfolio and also reviewing stock performance against target thereafter.

In keeping with the Live-Free Triple Play for capital plans we shared in our Season 1 | livefreeLiving album; WK Gahn lays down livefree plans for double-your-money as follows on its Portfolio Cores:

1. Double-in-5y or 15% (round) p.a. return … Ground Zero.
2. Double-in-3y or 24% p.a. return … Mid Level.

Any stock which falls out of kilter with the target annual return is reviewed for profit-taking. In the case of Bursa Malaysia listed TM (code 4863), WK Gahn profit-took in 3 years, as TM had doubled in 3 years (against target 5y).

Pssst! Did you know this? The Magic Ball 72 could be your ultimate Geek Party Trick Of The Year ! Share if you thought this was A-w-e-s-o-m-e!

 

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