# How did your portfolio do last financial year?



## VSntchr (7 July 2011)

Well last FY was certainly a tale of two halves!
For the first half I was up well over 30% and everything was quite rosey. However the second half was not as bright and I ended the year with a return of ~15.5% on my portfolio. 

I also ended the year with a few tax advantages which aren't fully reflected in this figure (eg through the JB share buyback).
This was the first year I have properly attempted to accurately track my performance, so my spreadsheet is still being refined - however I think I have it pretty correct.


I am quite happy with this performance, commsec tells me that the XJO produced a return of 9%.


Now just gotta do this for a few years straight and get that compounding going!!

How did everybody else go?


----------



## skc (7 July 2011)

VSntchr said:


> Well last FY was certainly a tale of two halves!
> For the first half I was up well over 30% and everything was quite rosey. However the second half was not as bright and I ended the year with a return of ~15.5% on my portfolio.
> 
> I also ended the year with a few tax advantages which aren't fully reflected in this figure (eg through the JB share buyback).
> ...




+57% in pairs trading
+29% across 3 other strategies

I do however have to pay tax on these...


----------



## Intrinsic Value (7 July 2011)

Up about 50percent but that was all from last year.


----------



## KurwaJegoMac (7 July 2011)

+34% (Before tax) using my own discretionary trading system.

Most of the return came from the first 6-9 months of the year - actually took the last 3 months off trading completely as I needed a break. I was trading continuously for the past year and I like to take a breather every now and again and focus on research and development. 

Not looking forward to the tax bill


----------



## VSntchr (7 July 2011)

Good to see some nice returns here guys!

Just spent a few hours getting my data sorted for this years tracking...im already up by 3.73% for the 7 day old year!


----------



## againsthegrain (7 July 2011)

up 120% but considering the previous years loses only about 10% up over all


----------



## skc (7 July 2011)

VSntchr said:


> Good to see some nice returns here guys!
> 
> Just spent a few hours getting my data sorted for this years tracking...im already up by 3.73% for the 7 day old year!




Well done. That compounds to 670% for the year


----------



## So_Cynical (7 July 2011)

Stator says my FY portfolio income was 29.77% Good first half and a mostly flat second half....Real Year on year portfolio growth was around 26% was probably over 30% back in April. 

Its been a big year, my biggest ever loser and biggest ever winner...i remain on target for retirement on my terms in 9 years time.
~


----------



## danbradster (8 July 2011)

Up about 40%, but mainly from a few big turnarounds/takeovers, ie OAK and AEJ.

The high potential companies for 2011 are probably - ALB, AOH, III, KCN, MRE, OGC, PBP, PLA, RFG.


----------



## cynic (8 July 2011)

Approximately 105% realised profits from sharemarket derivative trading activities.
(If unrealised profits were to be included, this figure would be somewhat higher.)

Most profit was derived from the final quarter as I had been trialling a couple of new brokers and needed to be satisfied before placing my trading capital "on the line". 

In order to bolster my trading account balance, I took a number of calculated risks during the final quarter.

As I intend to trade more conservatively henceforth, I do not anticipate returns of this magnitude for the current F/Y.

And , yes, I too am dreading the reckoning with the taxman.


----------



## VSntchr (30 June 2013)

End of financial year today so thought I'd revive an old thread.
I didn't post for the 2012 year but my result was -12.8% against a -11.2% XJO index.

Fortunately I went substantially better this year coming in at 79.5% against 17.3% XJO index. 

This year my big focus is not on trying to hit the big winners, but rather to avoid the big losers. I could have had my result up over 100% if I had have had some better risk management strategies in place.



How did you all go this year?


----------



## So_Cynical (30 June 2013)

Its hard for me get a realistic number for my portfolio because ive taken about 20% out in Jan/Feb for a real estate purchase, my total gross dividend return is only 4% up on last FY and realised profits well down on last year coming in at only about 12% where i have averaged 28% for the previous 3 years.

Overall a quiet year for me because i have been taking money out of the portfolio and doing very little trading...putting all my spare cash into another project.
~


----------



## ROE (30 June 2013)

VSntchr said:


> End of financial year today so thought I'd revive an old thread.
> I didn't post for the 2012 year but my result was -12.8% against a -11.2% XJO index.
> 
> Fortunately I went substantially better this year coming in at 79.5% against 17.3% XJO index.
> ...




32% but that including dividend, options and opportunity trading....
Get a bit harder with larger capital I accumately each year


----------



## McLovin (30 June 2013)

29.7% for the year. The years since the GFC have been very kind to me. When I look at what I had in 2006 and what I have today it's almost a 10 fold increase. It has been life changing.


----------



## Julia (30 June 2013)

McLovin said:


> 29.7% for the year. The years since the GFC have been very kind to me. When I look at what I had in 2006 and what I have today it's almost a 10 fold increase. It has been life changing.



Good to hear.  Congratulations.  To the point where you have no need to be answerable to an employer?
(Ignore the question if it's intrusive, McLovin.)


----------



## McLovin (30 June 2013)

Julia said:


> Good to hear.  Congratulations.  To the point where you have no need to be answerable to an employer?
> (Ignore the question if it's intrusive, McLovin.)




Yep. Which is a point I never thought I'd be at so young. I haven't "worked" for a couple of years now, but I've been working on a few little projects on the side. I don't see myself going back to a big IB again (not that they're hiring these days!), although if a role at smaller place came up I'd seriously consider it.


----------



## VSntchr (30 June 2013)

McLovin said:


> Yep. Which is a point I never thought I'd be at so young. I haven't "worked" for a couple of years now, but I've been working on a few little projects on the side. I don't see myself going back to a big IB again (not that they're hiring these days!), although if a role at smaller place came up I'd seriously consider it.




Being 23 this is super inspring


----------



## Beej (30 June 2013)

Mine ended up +24%, including about 6% of gross dividend returns (ie including franking credits). The dividends were all re-invested, sans the franking credits, which I won't get until I put in my tax return ;-)


----------



## VSntchr (30 June 2013)

> Get a bit harder with larger capital I accumately each year




Is that because your capital base prevents you from accumulating without moving the price? Or is it a function of large dollar amounts preventing you from taking the same % sized positions in somewhat riskier positions?
Or is it more because you have large amounts in stocks that have already given 2,3,4,5,600% returns and are now growing at much steadier rates?

Of course it could be a combination of all, just wondering what are the major impacts....


----------



## nulla nulla (30 June 2013)

Our portfolio is extremely liquid with short term holds reflecting the instability of the market and risk of exposure to long term holds. *The result for the past financial year has been a net growth overall of 23%* (after tax and living expenses). The result would have been higher had we elected to sit it out on 20 May 2013 rather than ride the exposure down before stopping out end of May.

Position sizing is harder as the trading pools shrink and the incidence of smaller traders predominates. None-the-less we expect to continue to trade the volitility into 2013-2014 for a similar return through the inclusion of additional shares, where appropriate, that fit our trading criteria.


----------



## ROE (30 June 2013)

VSntchr said:


> Is that because your capital base prevents you from accumulating without moving the price? Or is it a function of large dollar amounts preventing you from taking the same % sized positions in somewhat riskier positions?




Allocate large amount of capital to a stock or trade position, it's a psychological thing 
I can risk 20K-30K in a position and lose it and it doesn't bother me....it just like a cup of coffee 
because with this amount I can make it back within a few months....

but at 100K or 75K it starts to bother me, not that I have loss any money yet but there is always that thought 
I did pretty well up to now so capital preservation becomes a bit of an issue...

for example I dont want hard work earns 100K in gain this year, then lose it next year, 
I want that 100K to keep growing. I haven't been reckless still applied the 
same disincline but its a psychology thing

but hopefully this year I will break this psychology barrier....

Stock move and I have large capital gain, I happy to hold not an issue the issue is 
allocate large capital I have at hand from trading gain or dividend or saving ...

I have 200K in CCP from capital gain and I dont have an issue and still holding every single share 

and yes I tend to play with a higher risk stocks, with CBA or WOW 100K is really nothing but I like stock
that has a bit of issue, a bit of an ugly ducking, or small cap that can go either way or big boys slam dunk it.


----------



## VSntchr (30 June 2013)

nulla nulla said:


> Our portfolio is extremely liquid with short term holds reflecting the instability of the market and risk of exposure to long term holds. *The result for the past financial year has been a net growth overall of 23%* (after tax and living expenses).




After tax and living expenses you made 23%! That deserves a *CONGRATULATIONS!*

- - - Updated - - -



ROE said:


> Allocate large amount of capital to a stock or trade position, it's a psychological thing
> I can risk 20K-30K in a position and lose it and it doesn't bother me....it just like a cup of coffee
> because with this amount I can make it back within a few months....
> 
> ...



Thanks for providing your thoughts on the matter. I hope its an issue that becomes more relevant for me in the coming years 




> I have 200K in CCP from capital gain and I dont have an issue and still holding every single share
> 
> and yes I tend to play with a higher risk stocks, with CBA or WOW 100K is really nothing but I like stock
> that has a bit of issue, a bit of an ugly ducking, or small cap that can go either way or big boys slam dunk it.




I share your philosophy on the small caps - this is largely my area of choice. And yes for CCP too...its my second biggest holding...I got it cheap (hint: it was probably close to a 10 bagger for you at my entry price)...


----------



## Purple XS2 (30 June 2013)

Tax: I'm carrying a lot of accumulated losses from the GFC period, so allowing for that to be offset, capital gains tax this financial will be just a few %.
Living expenses: day job.

So net portfolio gain for 2012/13, haven't done the final reckoning, and the input to the investment pool grew during the 12 months, but in round figures, probably 100%.

Virtually all of that in the last six months, and 95% portfolio is biotech.
And mostly a single stock: AHZ (with some help from a couple of others).

Scoreboard? ASF stock tipping competition tells the story


----------



## Julia (30 June 2013)

McLovin said:


> Yep. Which is a point I never thought I'd be at so young. I haven't "worked" for a couple of years now, but I've been working on a few little projects on the side.



Ah, so truly life changing indeed.  Good for you.  I did it via property before shares, and went without much to get to early retirement, but oh how it was worth it to escape the corporate world.

Congratulations to all others who have done so well this FY also.


----------



## blue0810 (30 June 2013)

Sector performance

17.29	XJO
27.11	XDJ
25.07	XSJ
5.08	XEJ
-10.24	XMJ
31.11	XXJ
10.6	XNJ
41.21	XHJ
9	XUJ
37.33	XIJ
30.32	XTJ
17.41	XPJ
-8.33	XSO


----------



## AlterEgo (1 July 2013)

+36.7%, mostly mean reversion system trading. I'm reasonably happy with that, but hopefully I can better that this financial year.


----------



## craft (1 July 2013)

+66% on investment capital outside SMSF.

+45% for SMSF – I have put some more details about the SMSF return on this thread.


https://www.aussiestockforums.com/forums/showthread.php?t=25070&p=781653#post781653


----------



## sydboy007 (2 July 2013)

Only set up my SMSF last December.

My goal was stable income rather than a lot of capital growth, but it hasn't quite worked out that way.

Had:

12.25% capital growth
2.77% Gross income
Total: 15% over 7 months

Pretty happy with the performance considering around 1/3 has been in an ILB, with shares accounting for around 50% and hybrids 20% till June when I did a sell off of some shares and moved more into hybrds which seemed to have allowed me to sell out of the shares at near their peaks.

Some shares look a good buying opportunity at the moment, but I think I'm going to sit things out for awhile and just bank the income till I get a better feel on how QE tapering is going to go and what happens in Europe when Italy or Spain implodes.


----------



## sinner (3 July 2013)

Net for the FY is 11%.

Annualised standard deviation of monthly returns is 5.64%.

Most of the returns thanks to the Bank of Japan, as well as the strong performance from US indices.


----------



## qldfrog (3 July 2013)

amazing returns all around: 
A different story here, I will get back to you in a week or so when I can do the details:
3 accounts/strategies
* one a great looser luckily with the smaller capital involved but still
* one decent grandfather which still got a few bad hits with gold and the banks timing (went in too early in 2012)
* one TA strategy which sadly missed the uptrend as it was started end 2012 but stopped losses reasonably well and should turn break even or so

so for me a wasted year but for what i hope is experience and teaching.
would have preferred that learning experience not to happen in that time as i might not have such a nice general uptrend again to play with...
live and learn
will get back in details when I can compile these.
Would be keen to also know of other not so great experience: with the massacre on the resources, I would believe I will not be the only one to expect an ATO refund on my trading this year!!!!


----------



## Zedd (3 July 2013)

108% before tax. 10yr average up to 18%. Record vs XAO now 8/15.


----------



## odds-on (3 July 2013)

qldfrog said:


> amazing returns all around:
> A different story here, I will get back to you in a week or so when I can do the details:
> 3 accounts/strategies
> * one a great looser luckily with the smaller capital involved but still
> ...




You are not alone, my return is a double digit %, unfortunately it has minus sign in front of it! 

My concentrated portfolio policy of 2 or 3 stocks means it is volatile and the returns could be different in 6 months’ time (but who knows, such is life). A few learning points for me from this year:

1.	Time horizon - my contrarian views really need a longer time horizon (2-3 years) and I just do not have the required patience. 
2.	I really enjoy the study of gambling/investing/trading but must accept I am just not good at it in practice, this always make me think of the Yogi Berra quote "In theory there is no difference between theory and practice. In practice there is."
3.	I am comfortable with a concentrated portfolio due to it being a small % of my net worth.

In summary, I just have to seriously think about where my edge is to achieve the excess returns. No point beating around the bush about it, if I have no edge (business analysis, psychological, money management, technical analysis…) then there is no point playing the game.

Keeping an open mind and taking my personal circumstances into account, after some further reading, a strategy I am considering this year…

1.	Short-term concentrated portfolio aimed at buying the “favourites” after a dip and aim for small % gains. Recycle the capital.

Any other suggestions?

Uncle Warren and Uncle Jack keep whispering into my ear – average into an index tracker and forget about it!


----------



## Klogg (3 July 2013)

Net gain 42%. However, mine includes 14months as I started 2 months before the start of last FY... and I haven't bothered to separate it out.

Overall, quite happy with my first year, but I made a few HUGE mistakes...


----------



## Trembling Hand (3 July 2013)

odds-on said:


> 1.	Time horizon - my contrarian views really need a longer time horizon (2-3 years) and I just do not have the required patience.




These are two very conflicting traits to be trying to smash together. 



odds-on said:


> Keeping an open mind and taking my personal circumstances into account, after some further reading, a strategy I am considering this year…
> 
> 1.	Short-term concentrated portfolio aimed at buying the “favourites” after a dip and aim for small % gains. Recycle the capital.
> 
> Any other suggestions?




You are just doing the normal, ie what most who lose do, thing. Jumping from one unproven method without practise to another.

If you are heading down the trading path unless its back tested and forward tested you are wasting your time.


----------



## odds-on (3 July 2013)

Trembling Hand said:


> These are two very conflicting traits to be trying to smash together.
> 
> 
> 
> ...




TH,

Thanks for the advice, it is appreciated. I will scrap the trading idea. Time for a break from the very interesting but frustrating investing game.

Cheers


----------



## Trembling Hand (3 July 2013)

odds-on said:


> TH,
> 
> Thanks for the advice, it is appreciated. I will scrap the trading idea. Time for a break from the very interesting but frustrating investing game.
> 
> Cheers




If you have the trading bug you may want to have a look at the chartist and trade along side him. At least you will be doing two good things - following a proven method and watch a profitable trader.


----------



## cbc (3 July 2013)

Up about 260%

Would av been a lot more if I didn't hit a few issues out of my control.

See what happens this year.


----------



## Knobby22 (3 July 2013)

I was up 28% at one stage but ended up about 10% up. No gearing.


----------



## Porper (3 July 2013)

odds-on said:


> TH,
> 
> Thanks for the advice, it is appreciated. I will scrap the trading idea. Time for a break from the very interesting but frustrating investing game.
> 
> Cheers




If you have been trading ASX stocks only I wouldn't be too hard on yourself.

Don't forget that all the claims of 100% or 260.0% gains on here are just people behind a computer who don't have to prove their disclosures. They can say any random figure that comes into their head.  

The odd person I personally know to be profitable on here don't shout about it. They know who they are and if you read enough posts you'll know who to take notice of.


----------



## McLovin (3 July 2013)

Klogg said:


> Net gain 42%. However, mine includes 14months as I started 2 months before the start of last FY... and I haven't bothered to separate it out.
> 
> Overall, quite happy with my first year, but I made a few HUGE mistakes...




That's a great first year, Klogg.


----------



## beachlife (3 July 2013)

Porper said:


> Don't forget that all the claims of 100% or 260.0% gains on here are just people behind a computer who don't have to prove their disclosures. They can say any random figure that comes into their head.





Or perhaps they are telling the truth and are as good as the traders here

https://www.worldcupadvisor.com/worldcupchampionships/default_nwcc3.aspx


----------



## Klogg (3 July 2013)

McLovin said:


> That's a great first year, Klogg.




Thanks! Well above my expectations to be honest. And I don't expect to replicate it this year.
That being said, capital gains of 140% from Breville boosted that ridiculously... (Although it was only 15% of my PF after that growth).

TGA, BYI and RCG account for the rest of it.


Oh and just to add - no leverage in this.


----------



## minwa (3 July 2013)

Had deposits and withdrawalls at different time periods so a little hard to find a final figure. This is what my broker came up with time weighted calculations:




Decent return but really need to work on lowering the draw downs before allocating more capital into trading on leverage.


----------



## Porper (3 July 2013)

beachlife said:


> Or perhaps they are telling the truth and are as good as the traders here
> 
> https://www.worldcupadvisor.com/worldcupchampionships/default_nwcc3.aspx




Yes, I am sure they are all good honest traders making a fortune.

Incidentally Prechter & Robert Miner won the trading champs and both use Elliott Wave  Food for thought for the doubters.


----------



## TheUnknown (3 July 2013)

I don't get it......being new to the share game you hear some say it's almost impossible to make big bucks from shares trading short term once you hear that, then you got people saying they are making big money from shares.

After all that you go and check what the leading traders are doing around the world who manage funds etc they are returning 15%-25% per year...

Can someone please enlighten me?

Have been now following The Chartist trades for past 5 weeks even he doesn't make that sort of returns based on what some people are writing here and how they have left the corporate world.

I mean if you have 1 Million dollars in your account @ 3% return a month that is $30k per month, unless you have a big account you are hardly making money if i'm correct?

Once you hear all that you have other people telling you how they lost everything they had in the share market.


As pauline hanson would say.......please explain.


----------



## tech/a (3 July 2013)

TheUnknown said:


> I don't get it......being new to the share game you hear some say it's almost impossible to make big bucks from shares trading short term once you hear that, then you got people saying they are making big money from shares.
> 
> After all that you go and check what the leading traders are doing around the world who manage funds etc they are returning 15%-25% per year...
> 
> ...




You can get all sorts of reported returns from the one account.

Returns on total available capital
Returns on funds invested
Returns on funds at risk.

Each will give you vastly different %.
So you don't know what people are quoting
How much they are trading with.



> I mean if you have 1 Million dollars in your account @ 3% return a month that is $30k per month, unless you have a big account you are hardly making money if i'm correct?




In general terms you certainly are correct.
Very few here would be making more than an average wage from share trading.

Like all places of business there are the CEO's making big bucks
Middle management making better than most.
Blue collar workers getting by.
Casuals--they come and go.

ASF is no different.

As for me.

If I quoted figures against available funds my returns would be small to those quoted
On funds invested Pretty good
On Funds at risk Bloody amazing.

But the truth is I trade for an extra passive income---to most it would be a pretty good one.


----------



## beachlife (3 July 2013)

TheUnknown said:


> I don't get it......being new to the share game you hear some say it's almost impossible to make big bucks from shares trading short term once you hear that, then you got people saying they are making big money from shares.
> 
> After all that you go and check what the leading traders are doing around the world who manage funds etc they are returning 15%-25% per year...
> 
> ...




The fund managers are limited with what they can do because of regulations and the size of the accounts they manage, so their returns are small.  If XYZ falls they cant just dunp the lot, their position is too big.

Then you have private investors, who dont use derivatives and are happy to match or beat the fund managers.

Then you have short term private traders, who use cfd's, options, futures, forex and trade with smaller positions and higher frequency so its easier to get better % returns.  If XYZ falls just hit sell and they are gone in a heart beat.  They can also trade in both directions without restrictions.

So the good fund managers are making small % returns on big accounts over big time frame trades = big dollars.

The good traders are making big % returns on small accounts over small time frames, still can = big dollars.  

If you have say a small account and can make $500 per day on forex trades, then thats around $125,000 pa and a massive % return on capital.  But in dollar terms just as good as the fund with $1m that makes 12.5% pa.

Then you have the people that think profitable traders are liars, probably because they dont know how its done.


----------



## FlyingFox (3 July 2013)

beachlife said:


> The fund managers are limited with what they can do because of regulations and the size of the accounts they manage, so their returns are small.  If XYZ falls they cant just dunp the lot, their position is too big.
> 
> Then you have private investors, who dont use derivatives and are happy to match or beat the fund managers.
> 
> ...




You have quoted some returns earlier in the thread and in particular with regards to futures trading. Many here are trading shares on the ASX. The risk profiles for shares trading without leverage and derivatives is quite different. The implicit leverage in derivatives is quite high. Better to compare capital at risk in those cases.

Yes you can make large returns but also loose a lot of your capital. It is important to make this distinction as you have elaborated on in your post.


----------



## TheUnknown (3 July 2013)

tech/a said:


> You can get all sorts of reported returns from the one account.
> 
> Returns on total available capital
> Returns on funds invested
> ...





Thanks for clearing it up.

Like anything, you need money to make money.

Making an income out of it and living in Aus you would need a large account otherwise you would be risking a lot per trade and after that you got big draw downs.  

Like a business you can't start a business with 20k and expect to be making 200k per year.


----------



## beachlife (3 July 2013)

FlyingFox said:


> You have quoted some returns earlier in the thread and in particular with regards to futures trading. Many here are trading shares on the ASX. The risk profiles for shares trading without leverage and derivatives is quite different. The implicit leverage in derivatives is quite high. Better to compare capital at risk in those cases.
> 
> Yes you can make large returns but also loose a lot of your capital. It is important to make this distinction as you have elaborated on in your post.




I assume most of the results people have posted are return on capital.

Leverage does not mean increased risk of capital.  With correct position sizing and stops you can protect your capital no matter what you trade.  

If I trade 1000 CBA shares and it falls $1 I lose $1000.
If I trade 1000 CBA CFD's and it falls $1 I lose $1000.

The $ risk is exactly the same. 

The difference is 
for the CBA share trade I need around $68,000
for the CBA CFD trade I only need $2040 for margin. 

Even if you want to work on 2% risk, you only need a $50,000 account to take that trade.  But with a $50k share account you cant take it.  Maybe that's why the share traders dont do as well, not because of the risk, but because they cant afford the trade when they see it.


----------



## skc (3 July 2013)

TheUnknown said:


> As pauline hanson would say.......please explain.




It's easy to make big bucks from shares one time or another. It's hard to make big bucks from shares consistently over many years.

To put things in perspective, FY12 was one of the best ever for the Australian market. On the accumulation index (which included dividend), the return was 22.75%.

But look more closely, there were large divergences in the return of resources vs non-resources. The ASX 200 resource accumulation index XJRAI returned -7% , while the ASX 200 industrial accumulation index XJIAI returned 33%.

So the key to success last year was relatively straight forward. Be in the market, and not hold any resource stocks. You'd boost your return further by including a few well selected small / mid caps that have enjoyed fantastic PE expansion (and some enjoyed growth in the "E" as well) through FY13. It was a good year for stock pickers, but it was also a year where the tide lifted all boats in most things non-resource.

I am not trying to talk down those who's made good return last year... A good year should be celebrated. You were in the game, took the risks and were rewarded. Well done to you all. 

But work through a few bad / flat years and be consistently good over the long time... that's where one should aim for and also where most struggles.


----------



## Trembling Hand (3 July 2013)

beachlife said:


> I assume most of the results people have posted are return on capital.
> 
> Leverage does not mean increased risk of capital.  With correct position sizing and stops you can protect your capital no matter what you trade.
> 
> ...




Big problem with that assumption is that of course ignores portfolio heat which will/has increase your risk.


----------



## FlyingFox (3 July 2013)

beachlife said:


> I assume most of the results people have posted are return on capital.
> 
> Leverage does not mean increased risk of capital.  With correct position sizing and stops you can protect your capital no matter what you trade.




No but can mean increased risk in % of capital.



beachlife said:


> If I trade 1000 CBA shares and it falls $1 I lose $1000.
> If I trade 1000 CBA CFD's and it falls $1 I lose $1000.
> 
> The $ risk is exactly the same.
> ...




If you have $2040 and get leverage and loose $1000 you have a ~50% loss on capital. While someone with 68K will have a ~2% loss. Conversely, if it goes up by 2% your on 50% gain and the un-leveraged trader is up only 2%. Leverage is a double sided sword. Reminds me of the percentage thread lol.

However in both these cases you % return on capital at risk is the same.

Also see TH later comment re portfolio heat.


----------



## qldfrog (3 July 2013)

if anyone interested, out of my three trading accounts and not including cash rate  when money is not in so my $ loss are not as bad:

1)
my safe account was indeed break even after dividends are included, as i have franking credit with that, probably around +1 to +2%
-> forensic
got hit by gold collapse and resources downfall + too early in banks where I managed to loose 10%, exit and saw them climb high speed till May
-> lesson learnt-> use put options for protection, lower number of trades to lessen brokerage


2) my casino like trading account based on gutfeel:
a disaster around 15% loss (hard to be exact as i have huge delta in cash invested) each time I though it could not go lower, it did....
-> lesson learnt
my gutfeel can not be trusted-> give up throwing money around
will close the account or at least switch it to a TA 

3) TA based system under construction:
-3% or so after dividends, corrected an error in my formula in december, was unlucky to basically start from scratch (with a negative start ) in january

will persist as i get more confidence, behaved extremely well during the later retreat, will see if I can catch the next uptrend

overall , with different amounts allocated in each account, a loss of 4% after dividends, but excluding franking credit and cash rate of 4% or so when out of market (which was substancial in late 2012 and in the last 2 months).
So nothing to be scared of [nor happy with].
If i learn my lessons, will be money wisely spent....
All the best everyone for the new FY

And by the way no leverage used and controlled risk limited to less than 10% of total invested with (not foolproof but...stop loss and put options)


----------



## cbc (3 July 2013)

TheUnknown said:


> I don't get it......being new to the share game you hear some say it's almost impossible to make big bucks from shares trading short term once you hear that, then you got people saying they are making big money from shares.
> 
> After all that you go and check what the leading traders are doing around the world who manage funds etc they are returning 15%-25% per year...
> 
> ...





Pends what instrument u are trading, u won't see high returns on shares generally.

Trading derivatives u would hear some with big returns, others with complete loss.

Sadly qldfrog nothing can predict the future, not even gut feel


----------



## beachlife (3 July 2013)

FlyingFox said:


> No but can mean increased risk in % of capital.
> 
> 
> 
> ...




Read my post again.

I didnt day the account was $2040, I said that was the margin, then I said if you want to risk 2% of capital for a $1000 risk you need $50,000 capital, and a $50,000 cfd account will cover the margin, a $50,000 share account wont allow the purhcase.

2% of capital is 2% of capital no matter what you trade.


----------



## FlyingFox (3 July 2013)

beachlife said:


> Read my post again.
> 
> I didnt day the account was $2040, I said that was the margin, then I said if you want to risk 2% of capital for a $1000 risk you need $50,000 capital, and a $50,000 cfd account will cover the margin, a $50,000 share account wont allow the purhcase.
> 
> 2% of capital is 2% of capital no matter what you trade.




Not arguing with your point, in fact you are saying the same thing when you say share account will not allow the purchase. I suspect this will go back and forth so I will just say this: 

When you are trading with derivatives it is easy to be nearer 100% risk for your portfolio due to portfolio heat as per TH's comment e.g your entire portfolio is made of options. When you are trading completely un-leveraged you will not get anywhere close to that. Therefore the returns on capitals are so vastly different but return on capital at risk is similar. See T/A comments on his returns as well ...


----------



## beachlife (4 July 2013)

Yes leverage allows you to take more risk, but it doesnt force you too.  Money managment and position sizing is the difference between people that use it well and people that blow up - I have done both.


----------



## Porper (4 July 2013)

beachlife said:


> Then you have the people that think profitable traders are liars, probably because they dont know how its done.




Not so much liars although some on here obviously live in dream land.

The point is that people new to trading shouldn't be focussing on some of the comments and posts on here regarding massive profits. A very small percentage make a profit consistently. Most lose part or all of their capital. Just something that needs pointing out to those expecting to start trading and make 260.0%  every year. Some do...most don't.


----------



## sydboy007 (4 July 2013)

Porper said:


> Not so much liars although some on here obviously live in dream land.
> 
> The point is that people new to trading shouldn't be focussing on some of the comments and posts on here regarding massive profits. A very small percentage make a profit consistently. Most lose part or all of their capital. Just something that needs pointing out to those expecting to start trading and make 260.0%  every year. Some do...most don't.




I'll be happy to make a consistent 10% a year - starting to think it might be a tricky thing to do in the 2014 FY

Compounding works wonders over a decade or two.


----------



## FlyingFox (4 July 2013)

beachlife said:


> Yes leverage allows you to take more risk, but it doesnt force you too.  Money managment and position sizing is the difference between people that use it well and people that blow up - I have done both.




No but you end up taking more risk because you can. Like in your example, if you have 68K in cash in your portfolio. You will only be able to take that one position on CBA. Alternatively using derivatives or margin loans, you will be able to take on a larger position or more positions. 

Max possible risk to portfolio in scenario 1, 2%. In scenario 2 up to 100%. The point is not whether you are a good trader or not; I completely agree that you have to be to use leverage properly. But saying that people make 200% and it can be done easily to newcomers like myself and claiming everyone else is a liar is a bit misleading. However you did mention later that you are talking about leverage and derivatives so fair enough. This is not a mute point to be swept under the carpet.

People chasing 200% without leverage or proper understanding on how to use it properly, as you say you have mastered, are bound to shoot themselves in the foot. 

Back to the point I was trying to make. It is much better to compare capital at risk as it will give you comparable results. As an example, my current portfolio is mainly cash (Not much of a risk taker and I currently have a very poor understanding of the stocks ). Return on capital would be 5% over the year. Crap right?  Return on capital at risk is infinite (X/0.0 = InF; X> 0.0) (well as long as the bank guarantee is on and depends on how you account for inflation). Therefore I can claim I did better than most on this thread on return on capital at risk. Obviously it depends on how you look at things ...


----------



## craft (4 July 2013)

Unless you're measuring your return on the basis of ‘return on total capital’ then you are probably missing the big picture. What’s the logic of focusing on the return from only part of your available resource? 

If wealth creation is your focus then *compounding surplus earnings* is the key, without it you better really love what you are doing, because tomorrow it will be Groundhog Day again.

*CAGR on total capital*– only measure worth a pinch of salt.

No matter what anybody tries to tell you – leverage is a double sided sword.  Any earnings history, no matter how fabulous, multiplied by Zero = Zero.

_You_ will only improve _your return _by focussing on _*your process *_not by worrying about what others are doing.


----------



## Trembling Hand (4 July 2013)

craft said:


> Unless you're measuring your return on the basis of ‘return on total capital’ then you are probably missing the big picture. What’s the logic of focusing on the return from only part of your available resource?



Individual portfolio or strategy performance stats does have value.


----------



## Klogg (4 July 2013)

skc said:


> I am not trying to talk down those who's made good return last year... A good year should be celebrated. You were in the game, took the risks and were rewarded. Well done to you all.




This is why I'm not celebrating the result I got last year... It's only one year, and to add to that, the ASX rose nicely over that year.
If I can average 20-25% over the next 5 years, I'll be ridiculously happy. It's a tough ask, but I'll aim for it... That way if I get close, I'll still be happy.


I should also add, my returns were on total capital allocated at the start of the period... In the last few weeks I've put in additional funds, but have excluded this in the result (even though technically, they were included in late June).


----------



## craft (4 July 2013)

Trembling Hand said:


> Individual portfolio or strategy performance stats does have value.




At a process level – Yes.  

But big picture?

I think of it along the lines of this analogy. When looking at a business I’m not interested in which individual shops may be being opened, expanded, reduced or closed based on their individual performances.   I want to know somebody has got control of that process and what that process produces in overall return on capital. 

I don't give a rats that one small shop can make 200% return if the overall business return on capital is crap.


----------



## skc (4 July 2013)

craft said:


> At a process level – Yes.
> 
> But big picture?
> 
> ...




Surely you guys are agreeing and just talking past each other...


----------



## tech/a (4 July 2013)

craft said:


> At a process level – Yes.
> 
> But big picture?
> 
> ...




Agree.
One trade doent make a portfolio.
But if the Business only allocates 10% of capital to the shops
Its the return on THAT capital which is specific to the discussion.

If Like myself only a small % of capital ( Used for wealth generation/accumulation) is allocated to trading why would I need to include my return on all available if its not allocated to trading?


----------



## Trembling Hand (4 July 2013)

skc said:


> Surely you guys are agreeing and just talking past each other...




Isn't that what forums are for?


----------



## skc (4 July 2013)

Trembling Hand said:


> Isn't that what forums are for?




Lol... I was having some fried rice and now they are stuck to my screen!

It does seem to be the case for some of the threads here.


----------



## craft (4 July 2013)

skc said:


> Surely you guys are agreeing and just talking past each other...




Maybe we are just agreeing???  I can't imagine that TH doesn't have an eye on the big picture. And I didn’t mean to come across as disagreeing with his point.

Anyway back to managing my process, Long-Term investing has a slow feedback loop. I suspect wasting time talking past each other on forum is going to bite me in my returns down the track.


----------

