Measuring Your Investment Success: How?

[Lizard]

If you just want your returns on one specific share investment, you can put cashflows into a spreadsheet and use the IRR function to calculate a % return. I would think that if you put in monthly cashflows (negative for purchases, positive for sales), then calculate IRR you would then get a %/month return that you could compound over 12 months to give an annual return.

If you are still holding the shares, then the final cashflow figure would represent the market value of the current holding.

[Snoopy]

If you just want your returns on one specific share investment, you can put cashflows into a spreadsheet and use the IRR function to calculate a % return. I would think that if you put in monthly cashflows (negative for purchases, positive for sales), then calculate IRR you would then get a %/month return that you could compound over 12 months to give an annual return.

If you are still holding the shares, then the final cashflow figure would represent the market value of the current holding.

Good suggestion Lizard, I think I will try it.

What I have been doing is I think roughly equivalent. I have worked out:

1/ The weighted average (based on purchase volumes and purchase timing) holding time. Working backwards that gives me the start of my investment period.
2/ The net amount of cash I have put in in total.
3/ The number of shares I now hold so I have an end of study period valuation.

So given my actual finishing balance and time, and the actual cash I have put in together with the calculated average start time, I can work out my return. This is the same data I have put into my share price period graphs, the latest of which I published on the TUA thread today, and I repeat here:

Attachment 3082

The problem in my own mind is that I am not quite sure if this is really a good judge of my investment prowess. What should I compare this to, to see if I have done a good job on my acquisition timing? The obvious answer is the actual share price performance, compared to a my own return over that same period. But what if , in the case of TUA, I come out ahead. Yet following the actual share price it is obvious I missed out on many opportunities to make my average acquisition price much lower. Have I really done a good acquisition job?

SNOOPY

[tobo]

(No, I have not been thinking about this for 2 months)

You want to measure your success.
Yes, I can see the logic of measuring one stock against its own performance, but how do you even do that? Easiest is compare with if you bought all tranches on first buy date (=buy and hold), but that doesn't reflect reality that you didn't invest (or have) that amount the. Or, you can compare with the most amazing combination of buy-low sell-high repetitions, but that not realistc because (a) you are investing, not trading (b) 20/20 hindsight buy low sell-highs will EASILY outdo any human without a time machine.

There er two other things you can measure agaisnt.
1) how well other buy-and-hold people are doing
2) how well you are doing compared to what you would have donew (term deposits, bonds)