The Twenty Craziest Investing Facts Ever

I wrote a post in 2019 where I listed the 20 craziest facts ever. If you missed it the first time, you can hear me read it on The Goldmine podcast.

No list of crazy investing data points is complete without Bitcoin, so here’s one I missed the first time around: If you invested $7,200 in Bitcoin five years ago, your balance today is over $1 million.

Before the post, I just want to crowbar this in here. We got a listener question about getting a job in the wealth management industry:

It seems to come up frequently, and you mentioned in your last episode that how to change careers and become financial advisers is one of your most common questions. I’ve pondered a change myself for some time now and really enjoy personal finance, but I struggle to see myself being successful building a book of business.
One thing I’d like to hear you talk about is different opportunities in what I would call “adviser-adjacent” careers. Do good jobs for skilled professionals exist in financial firms that aren’t advisory roles? What are they, and how does one get them?

I’m going to be talking about this tomorrow at 5 EST with Ben and Josh. Hit the link if you want to join.

And now, the 20 craziest investing facts ever*

1. Since 1916, the Dow has made new all-time highs less than 5% of all days, but it’s up 25,568% over that time.
95% of the time, you’re underwater. The less you look, the better off you’ll be.

2. The Dow has compounded at less than 3 basis points a day since 1970. Since then it’s up more than 3,000%.
Compounding really is magic.

3. The Dow has only been positive 52% of all days. The average daily return is 0.73% when it’s up and -0.76% when it’s down.
See above.

4. The Dow has spent more time 40% or more below the highs than within 2% of the highs (20.6% of days vs. 18.4% of days)
No pain, no gain.

5. The Dow gained 38 points in the 1970s
See above.

6. Why am I using the Dow instead of the S&P 500? They’re effectively the same thing. The rolling one-year correlation since 1970 is .95.
Stop wasting your time on this.

7. At the low in 2009, U.S. stocks were back to where they were in 1996.
Stocks for the long-run. The very long-run. Usually. Sometimes.

8. At the low in 2009, Japanese stocks were back to where they were in 1980.
See above.

9. U.S. one-month Treasury bills went 68 years with a negative real return.
What’s safe in the short-run can be risky in the long-run.

10. At the bottom in 2009, long-term U.S. government bonds outperformed the stock market over the previous 40 years
Stocks generally outperform bonds, but there are no guarantees.

11. Gold and the Dow were both 800 in 1980. Today Gold is $1,700/ounce. The Dow is near 32k.
Cash flows > commodities.

12. Over the last twenty years, Gold is up 340%. Stocks are up 208%, with dividends.
You can support any argument by changing the start and end dates.

13. Since 1980, Gold is up 153%. Inflation is up 230%.
See above.

14. CTAs gained 14% in 2008 when stocks lost 37%. Since 2009 they’re up 2.5%. Stocks are up 282%.
Non-correlation cuts both ways.

15. If you had invested from 1960-1980 and beaten the market by 5% each year, you would have made less money than if you had invested from 1980-2000 and underperformed the market by 5% a year (A Nicky Numbers Special)
When you were born > almost everything else.

16. The Dow lost 17% in 1929, 34% in 1930, 53% in 1931 and 23% in 1932.
Be grateful.

17. Warren Buffett is the greatest investor of all-time. In the 20 months leading up to the dot-com peak, Berkshire Hathaway lost 45% of its value. The NASDAQ 100 gained 225% over the same time.
No pain, no premium.

18. Only 47.7% of stocks generated a life-time return that matches one-month treasury bills.
The reason why so many mutual funds fail to beat the market is that so many stocks fail to beat the market.

19. Dow earnings were cut in half in 1908. The index gained 46%.
The stock market ≠ the economy.

20. In 1949, the stock market was trading at 6.8x earnings and had a 7.5% dividend yield. 50 years later, it reached a high of 30x earnings and carried just a 1% dividend yield.
You can calculate everything yet still not know how investors are going to feel

*These numbers are as of March 2019, so some of them might be a little stale.