I only seem to be able to calculate a 10% return since inception for v4

[invest_newbie]

Hi,

My appologies for the ignorance.  I've spent a couple hours now looking through the portfolio on this site. 

I've tried to calculate the return since inception by looking at the historic buy/sell of the stocks and exporting it to excel and calculating the return for momentum v4.  I got only 10ish%.  I assumed all stocks were evenly bought, i.e. if my purse is 10,000 and i have 4 stocks, it would be $2,500 per stock invested. 

I must have donesomething wrong. Appreciate all you help!

[bryanmcn]

Could it be that your looking at the average gain?
How did you sort your data?

[invest_newbie]

Attached is the excel spreadsheet that i've used for my calculations.
thanks for your help

[DCA]

invest_newbie,

     What you have calculated is the average profit per trade.  I have been following the SSP since end of February and have an average profit per trade of around 8% currently.

     Remember that if you have a $1000 to invest and you make 10% then the next trade has $1100 to invest...etc.  This results in more growth than 10%  (The magic of compounding).  Replace cell H3 with =I2 and copy it down the H column and you will have $47,438.55 at the end of the trades listed.

    The numbers posted by SSP are 'frictionless' in that they do not include any cost of trade and assume that it would be possible to actually have executed the trade at that price.

    Recently there has been a virtual $50,000 portfolio that includes a transaction cost but is still based on the closing trade price.  The other thing is I believe this portfolio is also counting the unrealized gains.

D

[Super Stock Picker]

Hello invest_newbie,

Let me summarize how we calculate the portfolios' performances on this site.

We follow our portfolios' returns the same way an index would be built. It means that all the capital is always invested (no cash) and that the stocks in the portfolio are weighted proportionally to their performance since on hold.

So, the way to allocate the dollars between 4 stocks in the portfolio is not 1/4 if the 4 stocks have not recorded the same gain in the portfolio. Also, if a sale brings the content of the portfolio down to 3 stocks, then the remaining cash is not left unused, but reallocated on the 3 stocks still in the portfolio.

So, it is quite tricky to recalculate our performances since inception without the help of a software. But let's say, over a month, it is possible to track back the figures that are published on the web site.

For more information, this thread explains in details and with some figures how the performances are calculated:
How do we calculate the portfolio performances?

Here are also the two threads that explains how two virtual portfolios are managed:
Virtual $5,000 portfolio
Virtual $50,000 portfolio

And DCA is right, in those two threads, the performance given as the portfolio's performance includes unrealized gains. These threads are only two weeks old so there has been only one sell since inception.

I hope this reply helps you to understand better how we calculate our portfolios' performances. Do not hesitate to ask for more information.

[bryanmcn]

Hi DCA
Actually you should start at the bottom (H69) and copy up (forward in time). That still doesn't work because there are overlapping transactions. The only way to truly prove that the system works is through a virtual portfolio like the administrators have set up recently. Even though its somewhat unrealistic to rebalance, I applaude the effort to duplicate the performance.

[DCA]

Ouch!  Let's hope that my investment ability is better than my reading of excel spreadsheet dates.


     Because the only true way to prove a system is with real dollars and your favorite flavour of anti-acid for those "special" market days like today.

D

[invest_newbie]

Thanks a lot for all your help.  After a few hours on this site and going through every post, i've understood how it all works and in fact, put in 50k as per the recommendations that came out on the weekend for:

First Nickel Inc.
Mercator Minerals Ltd.
Timminco Limited
Rubicon Minerals Corporation
Blue Pearl Mining Ltd.

Now, i understand that these stocks are highly volitale. However, based on your history, do you see these stocks regularly going down 10% and then rebounding?
FNI and BLue pearl have taken quite a hit, so has rubicon.  Is there a need to be worried and cut my losses?
or is this normal, and i should sit back and (try to) relax?

thanks

[DCA]

I for one do hope that Rubicon does come back.  I am very close to stopping out on it.

In the mean time I believe the stock market is supposed to be relaxing, so therefore I insist on relaxing.

Remember, it is only money!

[invest_newbie]

i hope you don't mean taking a nose dive when you say, "relaxing".

True, it's only money; but, being the first time, you'd like to see a little gain first.

[bryanmcn]

What's the old saying ... sell in May and go away? (something like that)

Summer doldrums makes it difficult to trade successfully - they say.

I stopped out of RMX on April 24th at 2.38 and couldn't see any technical reason to get back in fast. I am getting close to stopping out of FNI as well.