Performance in 2012

Is the same, you can just add them up ... I track all my counter separate and combined else how did all of us get portfolio result.
You need to try and figure out where goes wrong.

(01-01-2013, 11:26 AM)corydorus Wrote: Is the same, you can just add them up ... I track all my counter separate and combined else how did all of us get portfolio result.
You need to try and figure out where goes wrong.

can you tell me what's wrong with my first table(the longer one)?

initial portfolio is 1(12/31/2011), subsequently, sell the current at 2 and buy another at 1 at the beginning of each month. the end portfolio is 2 with 12 in cash(12/31/2012).

how will you record all the transactions? Thanks

I believe your problem already starts on the first 2 transactions which I earlier I suspect is that you have significant gain within short period. First you dissect your problem by doing XIRR on the first 2 trades. Then expand to the rest as you learn.

On your first two trades, within 1 day your $1 investment gained 100% on next day which you sold at 2. This result high figure which make sense.

if you have more question send me email.

Hmm... Looks like few people calculate returns based on % increase in total assets or net worth. Last night my usd portfolio did super well. Even aapl rebounded significantly.

So for equity alone, returns are now about 15% avg asset invested. Quite happy with it.

But something to share, all this is before removing leverage. If I calculate base on net invested sum, equity returns are over 26%. Readers will know I am a proponent of leverage for past 1 year...

(01-01-2013, 12:04 PM)corydorus Wrote: I believe your problem already starts on the first 2 transactions which I earlier I suspect is that you have significant gain within short period. First you dissect your problem by doing XIRR on the first 2 trades. Then expand to the rest as you learn.

On your first two trades, within 1 day your $1 investment gained 100% on next day which you sold at 2. This result high figure which make sense.

if you have more question send me email.

I did a few experiments to explore XIRR. I found that not only a short term good gain amplifies XIRR, the earlier you make that gain, the higher XIRR is.

I think that XIRR is better in measuring a non-volatile portfolio(long only, no buy/sell transactions).

e.g.

[wrap]
[table=Date]
12/31/2011
01/01/2012
01/01/2012
12/31/2012[/table]
[table=Value]
-1.00
2.00
-1.00
1.00[/table]
[table=Transaction]
INIT
SELL
BUY
FINAL[/table]
[/wrap]

XIRR > 8100% end portfolio is 1 in portfolio and 1 in cash


[wrap]
[table=Date]
12/31/2011
12/29/2012
12/29/2012
12/30/2012
12/30/2012
12/31/2012[/table]
[table=Value]
-1.00
2.00
-1.00
2.00
-1.00
1.00[/table]
[table=Transaction]
INIT
SELL
BUY
SELL
BUY
FINAL[/table]
[/wrap]

XIRR around 200% only, end portfolio is 1 in portfolio and 2 in cash

though both made 100% gain within a day, according to XIRR, 1 is much better than 2, but in the end of the day, 2 has more cash and the same in portfolio....

Is not the volatility. Scenario one performs better because you made 100% in a day and pull the money out right after.
Thus XIRR is just trying to annualized to a year with that kind of margins. Thus is way better than Scenario two as your money is held up for the year.

Some pp may for ego reason may invest just $1, make ten times in a day and quit. In quality wise you achieved but very very small absolute.
Therefore need to try to invest as much as possible. And when you do this, to achieve daily 100% multiple for full year is impossible.


Cory

(01-01-2013, 01:41 PM)corydorus Wrote: Is not the volatility. Scenario one performs better because you made 100% in a day and pull the money out right after.
Thus XIRR is just trying to annualized to a year with that kind of margins. Thus is way better than Scenario two as your money is held up for the year.

Some pp may for ego reason may invest just $1, make ten times in a day and quit. In quality wise you achieved but very very small absolute.
Therefore need to try to invest as much as possible. And when you do this, to achieve daily 100% multiple for full year is impossible.


Cory

look at my scenario 2, I did make another 100% in one day and pull out on Dec 30th, 2012.

my scenario 2 has 2 part, one 100% in almost a year and pull out, then another 100% in just 1 day and pull out.

the other problem is that though in the end scenario 2 is in a better position than scenario 1, the XIRR of scenario 1 is much higher than scenario 2.

2012 was a pretty good year for me too.

NAV at beginning of 2011- 0.95
NAV at end of 2012- 1.16

Only bummer? I was under-invested (roughly 60% of my portfolio) throughout most of the year. Quite a few good ideas were gotten from the forum. Notable ones: Neratel and Popular.

For me, XIRR results in a more +ve return than my own non-standard way of computing returns. I have decided to continue to use my own approach as it's more conservative...

(01-01-2013, 01:59 PM)freedom Wrote:

(01-01-2013, 01:41 PM)corydorus Wrote: Is not the volatility. Scenario one performs better because you made 100% in a day and pull the money out right after.
Thus XIRR is just trying to annualized to a year with that kind of margins. Thus is way better than Scenario two as your money is held up for the year.

Some pp may for ego reason may invest just $1, make ten times in a day and quit. In quality wise you achieved but very very small absolute.
Therefore need to try to invest as much as possible. And when you do this, to achieve daily 100% multiple for full year is impossible.


Cory

look at my scenario 2, I did make another 100% in one day and pull out on Dec 30th, 2012.

my scenario 2 has 2 part, one 100% in almost a year and pull out, then another 100% in just 1 day and pull out.

the other problem is that though in the end scenario 2 is in a better position than scenario 1, the XIRR of scenario 1 is much higher than scenario 2.

Scenario 2 is better in absolute on the assumption that the scenario one no more invest. I have already explained the rationale you just have to read again. Scenario one is not practical because are we going for high xirr value or right size returns or both ?

Scenario 2 , those date that is differ by a day or two, you can cancel out -ve and +ve with appropriate amount mentally. And see what is left because the entries are just noise.

I think you need to think through the logics. As mentioned I won't replied here again. You are welcome to send me email.