But how do you evaluate trading vs. not trading? You need to compare “what would have been” to “what was” which is very difficult.
You are exactly correct Denny. You must know 2 additional pieces of information and without these 2, the information is near worthless (see below).
Keep in mind that Saul trades largely for 2 reasons:
- He has to sell something to buy something since he is retired and has no new money coming in
- He “tries on” stocks in small portions before fully committing to them.
These two issues are not everyone’s situation foe sure.
Smorg:
I think your effort is a noble one but lacks specificity. First off, you used just 3 months sample size. The project should go back to the inception of the monthly reports…they are all there and you can go back to track them over a longer sample size.
Four main issues otherwise are:
-
What were the tax implications of selling and churning a portfolio (doubt Saul is reporting post tax returns but not sure).
-
What would happen to the investments that he sold…what were those returns (they should be pretax if they had ever been sold).
-
You have been in midst of a great bull market…there is no indication of how the Saul portfolio does in a bear.
-
Tax implications have not been addressed.
So IMO, the short sample size along with these 4 items makes your initial project impossible to draw any conclusions.