The highest 20-year return in mutual fund history was 25.8% per year, achieved by the legendary Peter Lynch of Fidelity Magellan over the two decades ending December 31, 1994. Lynch’s performance turned $10,000 into more than $982,000 in 20 years.
Cheung was predicting that his fund would turn $10,000 into more than $4 million over the same length of time. Instead of regarding Cheung as ridiculously overoptimistic, investors threw money at him, flinging more than $100 million into his fund over the next year. A $10,000 investment in the Monument Internet Fund in May 1999 would have shrunk to roughly $2,000 by year-end 2002. (The Monument fund no longer exists in its original form and is now known as Orbitex Emerging Technology Fund.)
An excerpt from Commentary on the introduction to The Intelligent Investor by Benjamin Graham