If you invested money with Sequoia on January 1st 2011 you might get the impression you beat the S&P if you based your evaluation on the linear chart Sequoia updates every year. The day you invested. December 31st 2010:
Change after 5 years: Graph on December 31st 2015
This one of the reasons early success for some years is so valuable for fund managers when marketing their fund to investors. A friend of mine has a great track-record, having increased $100 into more than $1200 since 2008. If he decided to open his fund to outside investors, he could underperform the index by 3% a year for 20 years and in a linear graph his fund would still look like a success.
Consider the >optical< difference between the same set of results presented in a linear and logarithmic scale. The results are exactly same, in both cases investors who invest money after year 10 earn more in the red fund than the blue fund!
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