Performance
In order for visitors to be able to judge our investment style and success, we provide two key sets of data; namely our long-term compounding annual rate of return, and our complete track record covering all individual recommendations since July 1998.
Long Term Compounding Annual Rate of Return
We are proud to say that The Rivkin Report has delivered a 13.9% p.a. compound annual rate of return over 11 years from 1 July 1998 to 30 June 2009 net of estimated brokerage.
Our performance compares very favourably to the overall return of the Australian stock market (All Ordinaries Accumulation Index) of 7.8% p.a.
Long Term Compounding Annual Rate of Return Calculation Methodology:
In calculating our performance, we have made a number of necessary assumptions, which are outlined below:
- Simulation trading software was used to provide the calculation, starting with an account balance of $100,000.
- Brokerage estimated at 0.1% on both buy and sell recommendations. Including brokerage provides a more realistic picture of investment returns and provides a better comparison to managed funds.
- All open and closed trades are included. Open trades are marked to market as at 30 June 2009.
- The effects of tax are not included.
- Capital allocation of 5% for each trade. In recent years, The Rivkin Report has provided capital allocation guidelines which have generally been slightly lower or higher than 5%, depending on the assessed risk of each trade.
- At times, there have been many open trades; therefore, based on capital allocation of 5%, a standard portfolio would have been more than 100% invested. When the portfolio was fully invested, we assumed no more trades could be bought until a sell recommendation was issued. Conversely, at times, the 5% allocation meant the portfolio was not fully invested. During these times, we assumed zero bank interest.
- Given that it is highly improbable that members would have participated in every single trade, we ran a monte carlo simulation, which produced an overall return based on 5,000 simulations of members taking varying numbers of trades. While some portfolios would have returned more and some less, the simulation produces a reasonable estimate of the return generated by the average long term member of The Rivkin Report.
- Except where we have specifically recommended a trade to capture franking credits, we have excluded franking credits from the calculation.
- We have held constant the assumptions on our buy and sell prices, which are detailed further in the Track Record section below.
- Our long term compounding annual return is calculated each financial year and is current 30 June 2009.
Track Record
- Total completed trades: 519
- Average return per completed trade: 10.43%
- Average hold period: 32 weeks
- Profitable trades: 399/519 = 78%
Our full track record records all individual recommendations including the company name, ASX code, buy and sell price and dates, profit, return (%) and holding period.
Track Record Calculation Methodology
- Results are based on the average buy price (if there are multiple buy recommendations) and the average sell price (if there are multiple sell recommendations). Profit figures and returns do not include transaction costs. Dividends are included where stated. Care is also taken to ensure that trades are only recorded if the stock actually trades at our recommended price.
- As many stocks are recommended numerous times, at different prices, we have endeavoured to be as fair as possible in determining the summary. When a stock is re-recommended at different prices either above or below the original purchase price, only the original buy price is considered when taking into account the entry price for our track record. Accordingly, the result is either one profit or one loss, as opposed to multiple results. In a situation where the stock has gone up and subsequent buy recommendations have been issued at higher prices, only the original, lowest buy price counts. In a situation where the stock has gone down and subsequent buy recommendations have been issued at lower prices, only the original, highest buy price counts. We feel that this system is equitable, in that it is occasionally to the benefit of our track record and occasionally to the detriment of our track record.
- The exception to this method is when a subsequent recommendation is made that is an entirely new recommendation of the same stock, as opposed to merely reiterating the same recommendation, simply at a different price. If the buy recommendation is supported by different reasons to the original recommendation, or much time has lapsed between recommendations, they are considered to be different recommendations. This is often a judgment call, but is the only fair way of doing things in our view.
Please be aware that these results are not indicative of exactly how the portfolio of a Rivkin Report member will look. Obviously, one cannot and will not buy every stock. The results mentioned in no way represent current recommendations. Past performance is not a guide to future performance.
The following PDF file includes a full list of our recommendations since the beginning of 1998. (Last updated 4 January, 2010.)
