Hi Bob,
Looked at your numbers on BFR and found them very interesting. This is what I seem to see.
Original Investment $9,875.
Assuming brokerage commissions of $12 a trade with you making 32 trades $384 in commissions.
You make mention of being margined. Is your margin cost included/deducted from your returns in any way?
I ran a quick PCA chart with BFR figuring on once a week updates. I started with 250 shares at 19.75. ($4,938) and $4,938 in Cash Reserve. I got some interesting results.
R.O.C.A.R=72%
Average percent at risk = 55%
Total of 10 trades (4 buys and 6 sells)
Total shares owned today = 243. Seven less than I started with.
Total Cash owned today = $6,675. 1,738 more than I started with.
The average value of the Cash Reserve was $5,003. I t never got any closer to zero than 3,986.
From this I calculate that you would have made:
$550 in interest on Cash Reserve more than you have.
You would have spent 260 less on commissions than you have spent. This calculates to a difference of 16% on the original investment of 4938 or 8% on the total of stock/cash reserve. I consider that a significant difference. Of course we are not considering margin cost. There appear to be give or take 100 weeks out of the 114 weeks in the period when your cash reserve was in the red. What percentage did this cost you? At the very least it was 5% annually.
I have read some posts where people are confused by the term R.O.C.A.R. IMO this example explains it perfectly.
You invested(put at risk) $10,128. In a little over 2 years it turned into $17,787, possibly less considering margin cost.
AIM BTB put $9876 at risk initially and turned it into a total portfolio cash/stock of $13,794.
Actually, because of the outstanding performance of this stock, you could have started out with $4,938 in stock value and only $950 in cash and never have run out of reserve. This would almost double the percentage returns you received.
Just meandering at 4 am.
Bernie |
