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How to Get a 26% Return on Investments
Nick Sleep and Zechariah Nomad make investments at prices they consider to be 50 cents on the dollar of what a typical firm is worth. He would expect the business itself to grow its intrinsic value by around 10% per year. The effect over five years will be to compound one dollar of value into a dollar and 62 cents. This outcome would imply a return from purchase price of 50 cents of around 26% per annum. Nick admits that he missed out on companies like EMC, Dell, PMC, Sierra and Microsoft in the 90s when practically no one was holding shares during that period.