361% GAIN IN ONE DAY!!!

Congratulations to Mrs. Tucker. She has now made 131 times her original investment in one stock. The investment returns are getting so large that they are hard to comprehend.

Mrs. Tucker's cost basis in UNH (United Health Care) is $.73 per share. The stock closed at $95.71 per share today, up $2.64 on the day. Dividing the one day move by the original cost results in a one day gain of 361%! Funny math is being used to make a point that many folks miss. Folks are often content to earn a 5% bond yield while passing up a 3% tax advantaged stock dividend. By the maturity date of the bond, the dividend may have increased to the equivalent of a 15% bond yield. The stock value is likely to have increased as well. In the case of solid growth, the compounding effect, like in Mrs. Tucker's case, makes future gains very high relative to the original investment.

Last night a news program mentioned that investors in Warren Buffet's firm have made 6,000 percent during the life of the company. Mrs. Tucker has made 13,100 percent in about 22 years of ownership. The original purchase was not in United Heath Care but it was taken-over by United around 1985. The returns above do not count the nominal dividend that has grown to 4% of the the original investment. Mrs. Tucker has owned other stocks that did very well and others that did poorly but it only takes one 131 "bagger" to forever appreciate the potential returns in the market.

My Mom enjoys planting, tending and harvesting a garden. There are few things better than home grown beans, corn and tomatoes. Tending a stock portfolio is similar to tending a garden. You have to weed the garden and replant when the frost kills early plants but the rewards are many. Mom's Tractor Supply Stock, symbol TSCO, has been one of the pleasant surprises she planted in her portfolio garden. Mom and Mrs. Tucker will continue to plant the seeds, weed the weeds and harvest the bountiful harvest. Some years will yield better returns than others. Only the very best plantings will yield 361% in one day. How long do you suppose it will be before Mrs. Tuckers stock splits again and then one day yields her 722% return in one day?