Background

I was recently chuckled, when someone compared the legendary investor Peter Lynch against the worlds riches stock investor Warren Buffett and then concluded that Lynch was better than Buffett due to his higher % returns.

The highly simplified track records

Whilst managing Fidelity Magellan Fund from 1977 to 1990, Lynch did indeed achieved exceptional returns, with the fund averaging a 29.2% annual return over 13 years.   

In Buffett's case, whilst managing Berkshire from 1965 to 2023 (and still does), Buffett achieved a super returns of 19.8% per annum over 58 years and still counting.

However, to me, % returns is less important than sustainability.  More specifically, if you give each investor $1,000 to invest, by the end of the investment period, how much will you get?

Final Accumulation at the end of the investing periods

 What does this table mean?

1. Everyone has their own criteria for investing success.  There is no one way to determine success for everyone.  However, there should be one way to determine success for you.   
   
2. If you are someone that puts emphasis on yearly returns, then, since Lynch 29.2% is higher than Buffett's 19.8% then, you could consider Lynch to be better than Buffett, but would you consider me to be better than both of them since there was two years in a row where I grew RM80k capital to nearly RM400k capital or nearly 100% per annum consecutively for 2 years?  For the record, I don't consider this record to be superior.  Why? Because I alone knew what happened in the 3rd year where I took so much risk and so much leverage.  In short, to me, it is not my priority to focus on 1 or 2 year returns, or even 10  year return records.   
3. Can we assume that since Lynch made 29.2% returns over 13 years that he can continue to make 29.2% returns over 58 years, same as Buffett?  Short answer is no.  Why?  Simply because there are 13 year periods in Buffett's career where he exceeded 29.2% per annum.  In fact, Buffett is certain that if his capital is only USD1 million, he can make 50% per annum returns - he has stated that before.
4. My own experience in my past life has also shown me that if you want to make triple digit % returns on your entire portfolio - it is not too difficult provided you are willing to concentrate / use leverage and most importantly, you are willing to lose a majority of your capital when you are wrong.

Investment Horizon Matters

1. If you are in your 20s, 30, maybe even 40s, consider that your investment time-frame could be closer to Buffett than Lynch.   
2. Majority of 40 year old today can reasonably expect to live up to age 80, maybe even longer.  If so, the investment timeframe could be 40 years or longer.
3. For me, I am planning to live up to over age 95, and on this basis, I have nearly 4 more decades to invest.
4. As a result, I found someone like Buffett much more inspirational than Lynch, simply because I have followed Buffett for nearly 3 decades, and his track record of nearly 8 decades (even before Berkshire) is so long term that there is simply nobody on earth who is like him. 
5. Additionally, Buffett is 93 years old, and Munger lived up to age 99 and they have been following their investment style for an extremely long time.  If I live up to age 95, I would like to have the same investment style and live to a similar age between 93 to 99.  
6. As for Lynch, whilst I find him admirable and have high respects for his track record, however, he did stopped managing Fidelity's Magellan Fund after 13 years, and stopped publishing his track record publicly, and that's a non-comparison for me.
7. If you plan to invest for 40 years, then, it doesn't make sense to grow 1k to 28k and stop after 13 years.   Buffett's approach to grow 1k to 35.5 million and still growing makes a lot more sense to me.  Particularly when my goal is only half of Buffett i.e. to make at least 9% per annum total returns.  So, I prioritize "sustainability" a lot more than yearly % returns for the reasons below.  Here's my aspirational goal.

Summary and Conclusion

There's so many different ways to compare investment performance - it really depends on your criteria and which criteria you consider to be most important to you.  So, everyone can compare differently, but at the end of the day, only your criteria matters to you.  As long as it makes sense to you, applies to you and works for you, then, it doesn't really matter that others have different criteria or have different conclusions.

Disclaimer:  As usual, you alone are responsible for your own trading and investment decisions.