Quote from MarketMasher:
No way.....
Romney has light years more business experience than Obama - but 113% for 14 yrs???
http://www.ritholtz.com/blog/2012/08/attacking-bain-for-wrong-reason/
"No, they did not (as claimed) return 113% per year. In fact, their investment performance, according to their own data, was rather unremarkable."
"Letâs start with that silly 113% per year: Thats a more than doubling each year, and it would have turned $1.1 billion into $9 trillion over the same time period."
There is a discrepancy somewhere between what Bain averaged and what it was returning to its clients, your article doesnt explain that, and i highly doubt that Bain and company were charging fees to themselves on the money they had invested. This is from the Wallstreet journal.
Even at the lower number of 50-80% from their analysis, if Romney left his money at Bain getting those kinds of returns in an IRA for 20 years its not hard to figure out how he spun it up to 100 million.
Even if Bain did between 50-80% if you were to take 10k stick it in an IRA for 20 years at an average return of 55% and add 2000 per year to the IRA you end up with 100 million.
Anyway you want to slice the numbers its not hard to figure out how he could have spun an IRA into 100 million using Bains returns.
Mitt Romney's political foes are stepping up attacks based on his time running investment firm Bain Capital, tagging him with making a fortune from the rougher side of American capitalismâeven as Mr. Romney says his Bain tenure shows he knows how to build businesses.
Amid anecdotal evidence on both sides, the full record has largely escaped a close look, because so many transactions are involved. The Wall Street Journal, aiming for a comprehensive assessment, examined 77 businesses Bain invested in while Mr. Romney led the firm from its 1984 start until early 1999, to see how they fared during Bain's involvement and shortly afterward.
Among the findings: 22% either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested, sometimes with substantial job losses. An additional 8% ran into so much trouble that all of the money Bain invested was lost.
Another finding was that Bain produced stellar returns for its investorsâyet the bulk of these came from just a small number of its investments. Ten deals produced more than 70% of the dollar gains.
Some of those companies, too, later ran into trouble. Of the 10 businesses on which Bain investors scored their biggest gains, four later landed in bankruptcy court.
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A spokesman for Bain Capital said its "success rate in growing and turning around businesses in both strong and weak economic periods is very highâ¦" The company called the Journal's analysis "inaccurate and misleading" and said it unfairly put the onus on Bain for events at companies after it no longer owned them.
Seeking the protection of a bankruptcy court isn't necessarily a sign of long-term business failure. Many of the Bain companies emerged from reorganization healthier, just as, for instance, General Motors GM -0.35% did a few years ago. But while bankruptcy filings aren't a perfect measure of performance, they provide a way to assess a disparate array of target businesses that in many cases weren't required to make public financial filings.
The Journal's findings could provide fodder for both critics and supporters of Mr. Romney's presidential ambitions and of his role at Bain. Some experts, while conceding that available studies don't provide a direct comparison, said the rate at which the firms Bain invested in ran into trouble appears to be higher than experienced by some rival buyout firms during the era.
Romney's GOP rivals attacked the front-runner's conservatism, strength as a candidate and business record in a final debate before New Hampshire's primary. Patrick O'Connor has details on Campaign Journal.
That notion could undermine a central thrust of Mr. Romney's campaign message: that his private-sector experience building companies makes him the best candidate to turn around the ailing U.S. economy.
The numbers, however, also reflect Bain's investing style, which, particularly during the firm's early years, was focused on smaller and sometimes troubled companies that Bain hoped to fix or build.
Bain was investing in "riskier deals," said Steven N. Kaplan, a finance professor at the University of Chicago's Booth School of Business. "For every one that went bankrupt, they had one that was a screaming success. The overall effect was terrific performance" for the firm's investors.
The Journal analysis shows that in total, Bain produced about $2.5 billion in gains for its investors in the 77 deals, on about $1.1 billion invested. Overall, Bain recorded roughly 50% to 80% annual gains in this period, which experts said was among the best track records for buyout firms in that era.
http://online.wsj.com/article/SB10001424052970204331304577140850713493694.html
