Is it true that the stock of General Electric rose about 126%/yr between 1995-2000?

Question

In 1995 GE stock was about $8 and in 2000 GE stock was about $58. Is it true that it would be an increase of 630% over that 5 year period which would be about 126% per year during that time period?

Please correct me if I am wrong and explain to me how my logic is mistaken if I am wrong.

If I had invested $10,000 into GE in 1995 at the price of $8/share and then sold my shares in 2000 for $58/share how much money would I have earned?

Please refer to this link to see where I got my figures from:

http://finance.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chdet=1212538648683&chddm=1768640&q=NYSE:GE&

Answer 1

if you bought $10,000 worth of it at $8 you would have about 1250 shares

1250 shares x $58 a share is $72,500

so you would have a little over 700% gain, plus whatever dividend it paid over that time, I think there were two stock splits in that time period

so you would have done very well

Answer 2

Possibly, but that is voodoo math, sorta. I was raised to believe or taught that 100% of anything is 100%, or the total mass/value. This is not true or is a flexible value in economics that can be played with.

Now lower the numbers to actual. If one share was invested @$8, and the value increased to $58,,well is kinda simple math.

For every $1 invested the profit would be $47, times five years, 47x5=235

Now add the zeros and null points.

$235,000

Deduct the brokerage,attorneys, CPA and any handling charges, $118,000

Math is FUN

Answer 3

I did many times better than that with Amazon.com. Closer to 2000% a year for three years. And I put a lot of money in to it.

But here is the deal. Few get that. The reason a price is low is because most people are selling, not buying. The reason they go to such highs is that everybody is buying not selling.

If people start selling the price of a stock that is overpriced falls fast. So only the first people out make the money. Look where it is at now.

It is emotionally difficult to sell a stock that is skyrocketing and most people ride it back down.  

And you have to watch percentages.

If something goes up 60% then falls 50%... don't think that you made 10%.

You really lost money.

Answer 4

Yup. You would have  $72500 and then adding dividends would probably be more than $100000 (especially if you reinvested the dividends through their DRIP). That's the beauty of investing, and part of the shoud'a, would'a, could'a...

That's also why people shouldn't ignore blue chips. They still and probably will grow well over the years.