A single speaker explains why percentage returns matter more than dollar gains when evaluating investments. Using a hedge fund example, the talk shows how the same dollar profit can look very different depending on the money you started with.
The very first thing that a person needs to get used to is to think in percentages instead of money. And I use this fictional example all the time. There's two hedge funds. One returned 14% and one returned 38%. Which one did better? And everybody automatically would say, the one who did 38%. Well, the one who did 38% has 100 million under management. They made 38 million. And the one who did 14% has a billion under management. They made 140 million. So now which one did better, the one who made 38 million or the one who made 140 million? Right. Well, to me, it's still the one who did 38 million. Right, because they think in percentages. So, you know, you and I have different size trading accounts. Actually, I don't know that to be a fact, but I guarantee you it's a fact. You know, you might have 100,000, I might have 99. You know, it just. It doesn't matter. But from a percentage perspective, people will always judge us on what our return was in percentages.
