# OT: Return Calculation

I say this posted on the Saul board and wanted to ask a question, but I’ve been told by the Fool that I will be banned for posting there again. ExponentialDave posted this:

My portfolio is up 74% as of writing on 5/22/2022 from when I started tracking my results in January of 2020. This means that, \$100 invested in the ExponentialDave portfolio on January 1, 2020 would now be worth \$174 …

Monthly YTD performance at the end of each month
Jan 2022: -24%
Feb 2022: -28%
Mar 2022: -30%
Apr 2022: -46%
May 2022: -59% (as of 5/22/2022)

2020 Performance: 225%
2021 Performance: 30%
Cumulative Performance 1/1/2020 - 5/22/2022: 74%

I’m curious about his cumulative performance calculation. Since he’s down 59% this year, shouldn’t the calculation be 1002.251.3*0.41 for a total return of 119.925? Since Jan 2020 and not the 74% return he is claiming?

PP

Why don’t you simply email him without posting on the board?

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I’m curious about his cumulative performance calculation. Since he’s down 59% this year, shouldn’t the calculation be 1002.251.3*0.41 for a total return of 119.925? Since Jan 2020 and not the 74% return he is claiming?

You would multiply by 2.25 if he was up by 125% in 2020. Since he is claiming to have been up 225% in 2020, you would multiply by 3.25. So the calculation would be 1003.251.3*0.41 for a total of 173.225.

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Thanks.

2020 Performance: 225%
2021 Performance: 30%
Cumulative Performance 1/1/2020 - 5/22/2022: 74%

Though it sounds like a wild ride for the fellow, that’s 26.0%/year compounded for 2.39 years.
For comparison, Berkshire has managed 14.1%/year in the same stretch.

I’m not sure what lesson to draw. A bubble is a terrible thing to waste?

Jim

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