Returns (as note to self)
September 17, 2012
– Comments (2)
I spent the morning running my CAPS picks as if I had invested $10,000 in each of my 76 picks at the time, and taken profits if I had a end date, or as if I sold out today if I didn't. Then I compared to what investing in the index at the same dates would have done.
End result -- I'd have invested $740k over the six years and had a return of $1.04m, or a profit of 41%. Annualizing this only gets 5.8%, but my IRR was 24.9% as there were buys and sells. In fact, my average holding time was 569 days, or almost 19 months. I didn't hold anything between Jan 2007 and Aug 2008. Comparing this to if, when I'd 'bought' and 'sold' stock, I'd instead just bought the index, I'd have again invested $740k and had a return of $963k, or a profit of 30%. This annualizes to 4.5%, slightly more than a percent under my picks. However, the IRR would have been 17.8%, which indicates a 7% outperformance! This give me a few comparisions:
Mine Index
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41% 30% -- profit margin on investments
5.8% 4.5% -- annualized profit
24.9% 17.8% -- internal rate of return
And my Average Pick Score is +11.25% So is this good? Is this better than, say, Walter Schloss who averaged a 15.3% compound return over the course of five decades, versus 10% for the S&P 500. (according to Wikipedia)
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