The following satire may contain more truth than humor as we look at traditional investing from the investor's point of view:
The other day I phoned my broker to needle him about my latest investment. When I told him that I had just invested several million dollars in old European paintings, he nearly fell out of his chair. Everyone knew that a Van Gogh painting of sunflowers, which was recently auctioned off for an astronomical $36 million, had a market value of a measly $125 in 1889.
The line went quiet. "Well, what do you think of that?" I asked. I heard a click and then a tap, tap, tap.
"Let's see," he mumbled, "that growth works out to be approximately a 13.7% compounded annual rate of return."
"What is?" I snapped.
"I happen to be referring to your 98-year-old oil, wood and canvas with the Van Gogh signature in the corner," he said. "That's not really so great," he continued. "As a matter of fact, my favorite growth mutual fund has compounded at an annual rate of 13% for the past 54 years, and in 1983, many of my clients loaded up with those stripped treasuries you have often scoffed at that guaranteed the same performance for 30 years."