Negative Theta Options over Weekend
- Thread starter TraderGreg
- Start date
Quote from magicz:
you can still beat the sp by 32% this year and still be negative. lets do some fuzzy math.
sp500 ytd -14%
super fund beats that by 32%
so super fund is only -10%!
BTW i beat the SP500 this year also by only 28% i am -11%!
I don't calculate it that way, it would be misleading as you're alluding to. I am neither negative for 12mos nor ytd.
Put another way, IF this was a fund and someone put $100k into it on Aug 14, 2007 and also into the SP500 on the same date, The SP500 acct would show approx ~$88,250 current balance and my book would show a current balance of ~$119,850.
I do not want to upset you but if someone asks for your performance they simply want to know how much money you had in your account a year ago (X) and how much you have now (Y) and then simply do (X/Y) for the period return.
All this talk about units and hypothetical scenerios sounds like obfuscation. You do not know how much your book would show hypothetically from Aug 14, 2007 until now because indexing your portfolio is not accurate by any means. No need to index it, simply take the portfolio value on 8/14/07 and the portfolio value today and do the math.
In all honesty, undergrad business majors understand how to calculate ACTUAL returns on portfolios unless this is hypothetical which would clarify a lot of the posts we are seeing here.
In an interview, if I told someone that my portfolio is up 33% versus the S&P500 and I showed an indexing of my portoflio as opposed to simply saying this is the Actual return, would lead to me being shown the door.
Say what you want but some of the posters here I know and work for or used to work for trading desks and IBs and the way you state returns leads to only two conclusions, you are hiding something or they are hypothetical.
Phil, we just diagree philosophically on this minor point. From my previous post it is easy to calculate absolute return. It is my contention that absolute returns mean almost nothing unless there is reference to an index. I'm truly not trying to hide anything, it's just part of my philosophy that returns must not be judged in isolation. Nothing tells me LESS about a mutual fund's 10 or 20 year return which are often touted as selling points. The only long-term absolute return I am interested is the SP500's 10%+ avg for the past 80+ years.
Any return must be judged against the environment it is operating in. I do know what my book was on Aug 14, 2007 - it was cash. I'd be happy to post my actual returns, but what would be the point.
Atticus Junior, err, I mean xflat, your silence is deafening.
Absolute returns can simply be compared to absolute returns of the index.
Since 8/14 Fund A is up 33% while during the same time period the S&P is down 10%. That is what fund managers and everyone in the industry uses for comparitive returns. Not sure why you want to dispute over this and use a different hypothetical method than what everyone else does. If you traded for a few years than simply calculate your annualized returns.
You have to realize that no one pays much attention to how you do over a defined period of time which leads to data mining. That is why people always ask for minimum of 3 years of track record to see some consistency.
So if you make 33% a year for 3 years in a row then you have a lot of reasons to feel proud. If you claim you did 33% versus the S&P500 for 10 months than I GUARANTEE everyone will tell you to call them in 3 years when you prove you can do it consistently.