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The Gutman Fund
For individual stock returns: Current Price / Purchase Price x 100
i.e. We purchased Intuitive Surgical (ISRG) on March 3, 2009 for $87.37 per share. Today (October 27, 2009) it is worth $258 per share.
$258 / $87.37 x 100 = 295%
Total stock return: Average of all individual stock returns
Market returns versus The Gutman Fund
Comparing individual stock returns: Stock Return – [Current market price / Historical market price (day the stock was purchased) x 100]
i.e. The DJIA’s historical price on March 3, 2009 was 6726.02. Today it is at 9,882.17. We will compare Intuitive Surgical’s returns to the Dow’s in this example:
295% – [9,882.17 / 6726.02 x 100] = 295% – 147% = 148%, therefore, our investment of Intuitive Surgical is beating the Dow’s returns for the same time period by 148%.
Individual Market Return:First take the market’s current price divided by the historical price during the same holding period as Stock A, repeat with all stocks. Then, calculate the average.
“Beating the Markets by” number: Average of the DJIA, NASDAQ and S&P500 comparable returns.
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great “back to the basics” for beginners and 20 plus year professionals. Invaluable information and tons of fun to read! I would like to meet you at some point or at least talk over the phone.
Thanks again,
Jim Kimberlin 901-830-5932