As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

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Value Investing
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Monday, 29 June 2015

Investment Portfolio Performance Measurement: Absolute and Relative???


In absolute term; Uncle8888's investment portfolio total return on 11 Oct 2007 is 145% and on 29 Jun 2015 is 148%

Does the two absolute number of 145% and 148% look same and okay?

It is how absolute number says it loud and clear!

145% and 148%!


SMOL: Trust but Verify!

From Jan 2000 to 11 Oct 2007, the relative return in CAGR is 12.2%; but from Jan 2000 to 29 Jun 2015, CAGR is just 8.1%

Still same? Still okay?

When somebody tells you their Absolute Return. You should ask them for their Relative Return e.g. CAGR too.

When somebody tells you their Relative Return e.g. CAGR. You should ask them for their Absolute Return too.


Trust but Verify!

 

3 comments:

  1. Hi CW8888,

    Is it the law of big numbers catching up? i.e. Easier to generate higher CAGR on a smaller base and harder to generate the same CAGR on the bigger base

    Regards

    V

    ReplyDelete

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