Performance in 2012

[Musicwhiz]

Like I said before, this forum needs some serious moderations in calculating returns. Moderators, can you please put in a single solid structure for recording returns like all the funds out there. Using NAV is the best method. While we can't audit other people's returns, we just have to put our faith into honest forumers. At least we can still have apples to apples comparison.

While I appreciate the suggestion, it really isn't the job of the Moderators to dictate what people should or should not be doing. As some of the forumers have mentioned, sharing performance is voluntary and there is no "superior" method for doing so.

Thanks.

[corydorus]

Like I said before, this forum needs some serious moderations in calculating returns. Moderators, can you please put in a single solid structure for recording returns like all the funds out there. Using NAV is the best method. While we can't audit other people's returns, we just have to put our faith into honest forumers. At least we can still have apples to apples comparison.

I think not everyone agreed NAV is best though. I still prefer XIRR.

I imagine this scenario if the suggestion is implemented...

"You'll get a 1st warning for posting XIRR instead of NAV. If you violate the rules again on posting XIRR instead of NAV, we'll freeze you for 1 week. One more violation, and you're permanently out...."


PS. I think very few will want to share their performance in future...

Good one. Without free speech, if such suggestion gets adopted, we may go towards the path of "Authoritarian Regime".

[safetyfirst]

take it easy... the important thing for me is my investment portfolio beats inflation, beats the sti index. i wont really mind if other forumners use XIRR, NAV, etc..

[CityFarmer]

First of all, it will not make much a diff in % for XIRR, NAV or even non-professional method IMO

The intention is to give a rough gauge on valuebuddies' performance vs STI in 2012

I supports free speech as long as it is facts.

[Temperament]

Actually to me it doesn't matter what method you use. The most important is the tracking of my stock portfolio is showing UTD absolutely return in capital in terms of capital i started with since day one. And every transactions regarding stocks should be captured correctly. To make it simple my starting capital is a fixed "Virtual Bank $$$" large enough that never goes negative. Another words i am tracking cash flow.
Even after fixing this tracking of stock portfolio's money for every transactions, i do get >1000% annualised return for one stock. i erased then input this stock data for few years but i still get the same result. i realised i did a few short-term tradings with this stock. So UTD absolutely return of capital is most important to me.

[wee]

I am not in position to tell anyone which method to use, so please feel free to just read the comments below for information only.

Actually i think it does make a difference as highlighted above depending on how one uses IRR/XIRR, how much cash one hold in the year and for how long one holds the cash. If one have a robust method to adjust XIRR results to compensate for the differences (like Cory suggested), then it may work to allow cross comparisons among different investors using different methods. Otherwise it will be difficult to make cross comparison.

In fact, it can be difficult to compare two investors even if they are both using IRR/XIRR, as one may be fully invested all the time, and another likes to hold, say, 30% cash all the time.

The same issue is true even for an investor who wants to compare his results across time periods. Say in year 1, he may hold 100% stocks all the time, but in year 2 a bull market came along and he totally sold out in Q1 and held cash for the rest of the year. I am not sure how useful is it to compare his XIRR results for the 2 years.

All these nuances, if not highlighted, makes it difficult to use IRR/XIRR as a comparison tool. Its like 2 identical companies (with identical earnings and assets) one reporting in IFRS and another reporting in US GAAP and there is a 20% difference in their year end profit figures due to the difference in accounting method used. If there are no disclosures to explain the differences, how would an investor form his conclusion?

First of all, it will not make much a diff in % for XIRR, NAV or even non-professional method IMO

The intention is to give a rough gauge on valuebuddies' performance vs STI in 2012

I supports free speech as long as it is facts.

[smallcaps]

I am not in position to tell anyone which method to use, so please feel free to just read the comments below for information only.

Actually i think it does make a difference as highlighted above depending on how one uses IRR/XIRR, how much cash one hold in the year and for how long one holds the cash. If one have a robust method to adjust XIRR results to compensate for the differences (like Cory suggested), then it may work to allow cross comparisons among different investors using different methods. Otherwise it will be difficult to make cross comparison.

In fact, it can be difficult to compare two investors even if they are both using IRR/XIRR, as one may be fully invested all the time, and another likes to hold, say, 30% cash all the time.

The same issue is true even for an investor who wants to compare his results across time periods. Say in year 1, he may hold 100% stocks all the time, but in year 2 a bull market came along and he totally sold out in Q1 and held cash for the rest of the year. I am not sure how useful is it to compare his XIRR results for the 2 years.

All these nuances, if not highlighted, makes it difficult to use IRR/XIRR as a comparison tool. Its like 2 identical companies (with identical earnings and assets) one reporting in IFRS and another reporting in US GAAP and there is a 20% difference in their year end profit figures due to the difference in accounting method used. If there are no disclosures to explain the differences, how would an investor form his conclusion?

First of all, it will not make much a diff in % for XIRR, NAV or even non-professional method IMO

The intention is to give a rough gauge on valuebuddies' performance vs STI in 2012

I supports free speech as long as it is facts.

Yes, cash component can be included in XIRR on a portfolio basis.

One problem with this is that I did not kept records of how much cash on hand that was supposed to be invested, whether did I spent away the profits and so on. Thus, end up assuming that all money that has ever been made from stocks are never taken out of the portfolio...

But I guess NAV has the same problem as long as the cash available for investment was not recorded properly ...

[KopiKat]

First of all, it will not make much a diff in % for XIRR, NAV or even non-professional method IMO

The intention is to give a rough gauge on valuebuddies' performance vs STI in 2012

I supports free speech as long as it is facts.

Fully agree...

I'm most appreciative to all who'd shared. It gives me a good gauge of my own relative performance and brings me back down to earth on years when I'd done very well and starts to become complacent... On years I'd done badly, it's indeed comforting to know others (whom I respect greatly in this forum) are also fellow sufferers.. Hee...

It doesn't really matter to me whether it's NAV, XIRR or something else. There's usually enough additional info provided such that we can read those figures posted in the right context. Many a times, it also reveals more about the forummers, just like what WB said about Analysts' Reports usually reveals more about the Analysts than the stock being analysed... Hee..

Interpreting other's post can be an art, not too different from analysing Financial Statements... What you want don't usually get presented to you in a platter... in the standardised format you'd love to have... Learn how to read between the lines and it can be fun and rewarding...

[tau281290]

Like I said before, this forum needs some serious moderations in calculating returns. Moderators, can you please put in a single solid structure for recording returns like all the funds out there. Using NAV is the best method. While we can't audit other people's returns, we just have to put our faith into honest forumers. At least we can still have apples to apples comparison.

While I appreciate the suggestion, it really isn't the job of the Moderators to dictate what people should or should not be doing. As some of the forumers have mentioned, sharing performance is voluntary and there is no "superior" method for doing so.

Thanks.

That was probably silly of me to suggest NAV in the first place. But we should at least include cash, dividends, and both realised and unrealised gains/losses for calculating returns.

[smallcaps]

Like I said before, this forum needs some serious moderations in calculating returns. Moderators, can you please put in a single solid structure for recording returns like all the funds out there. Using NAV is the best method. While we can't audit other people's returns, we just have to put our faith into honest forumers. At least we can still have apples to apples comparison.

While I appreciate the suggestion, it really isn't the job of the Moderators to dictate what people should or should not be doing. As some of the forumers have mentioned, sharing performance is voluntary and there is no "superior" method for doing so.

Thanks.

That was probably silly of me to suggest NAV in the first place. But we should at least include cash, dividends, and both realised and unrealised gains/losses for calculating returns.

My understanding is that those are all accounted for by XIRR as long as the records are there...