What is a realistic return on value investing?

[cif5000]

Why are you guys talking about the market return of S&P? Does "realistic return" simply mean the market return?

As far as I know, practitioners of value investing produce annual results ranging from negative (or should I say losses) to triple-digit gains, even on the same year. It really depends on the person rather than the method.

You put in more effort and you'll tend to get better results. You have more experience and you'll suffer smaller losses. That's the real world. Hardly the method you used.

An individual result, should be aggregated result from method used, skill (includes experience), and effort, IMO.

Exactly my point, isn't it?

1. Realistic return should not be merely the market return.

2. Realistic return from value investing should not just come down to a nice round number. It can only be a range and this range is HUGE. The reason being it huge is not because of the method but because of the person who uses the method.

How about the "realistic return" is the min of the "huge range". The min return is to make an individual value investing journey feasible.

The "huge range" is huge over short term, but might not be too huge over longer term. Of course, we are referring to those real value investors, rather than self-claimed. Mr. Buffett's CAGR was ~20%, Yeoman Cap was ~14%, and passive ETFs are 8-10%, so the "huge range" of long term return may be less than 10%. It is huge as CAGR, but likely not the same scale as your definition of "huge".

Good that we agree on the first point that it should not be just the market return.

If you exclude the "self-claimed" and use only the "real value investors" you will commit selection bias and survival bias in populating the data. A realistic minimum return is a negative number (i.e. losses).

Short term is a huge range. So is long term. If you take 20-30 year and do an average, you should also compound the "few percentage difference" and look at the cumulative effect after 20-30 years. The range is huge!