# The 2013 XIRR Thread



## mrPPincer (Nov 21, 2011)

Happy New Year everyone, here's to a safe and prosperous 2014 !!!

So, I'm interested, how did you do this year, and what were your strategies?

Why XIRR?
In my opinion, I'm in agreement with those who say that xirr is the only way to avoid the comparing apples to oranges scenio, but if you're not into spreatsheets etc, I'm still interested in how things went for you in 2013.

Why compare?
It's not some kind of contest, it's just an anecdodal study just for fun, ie, how did indexing do this year, or how did some of the stock pickers do this year, or those with more sophisticated strategies, if they care to share, how did that play out this year.

Final note, if for example, you have just won the lottery on Dec 29 and invested everything in a penny stock on Dec 30 and doubled yor money, please make note of that; it's the one thing that any potential would-be xirr naysayers are critical of, but, of course, any such circumstance would play itself out in the next year and any such person would either be the next Warren Buffet or broke, so no big deal.

---

I'm kinda happy.
Through, I'm absolutely certain, sheer luck,

2013 XIRR 20.40%

2012 XIRR 11.62%

2 YR XIRR 16.96%

---

My strategies,
mainly an index investor, but I've been pulling more of my money home here to Canada for the favourable tax treatment.
Thus I've bought some CNR at under $100 before the split; it's gone up over 21% since then.. like I said, lucky.
I had too much in one stock on that one so IU sold some when it was up 17%.

Another couple wins were Telus and Potash Inc which are up 10% and 17% respectively.
Losers were the REITs and utilities, down 8% to 15%.

Another lucky thing for me was that I downsized my exposure to gold before it corrected, by moving a goodly sized chunk of Canadian equity into Vanguard FTSE Cdn High Div Yd ETF from another more basic Cdn index product, but again, just luck 

---

How was your 2013?


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## Uranium101 (Nov 18, 2011)

Sorry to burst your bubble, but I think you did not beat the S&P500 index.


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## mrPPincer (Nov 21, 2011)

Forgot to mention, I'm assuming everyone includes any investing cash stash, or other portfolio fixed income in their XIRR calculations, thanks for sharing


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## AltaRed (Jun 8, 2009)

Uranium101 said:


> Sorry to burst your bubble, but I think you did not beat the S&P500 index.


He should not have done so with a properly diversified portfolio of global stocks and a fixed income component and cash.


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## namelessone (Sep 28, 2012)

39.7%. (In CAD)
50% Canadian stocks, 50% US stocks. Now the allocation is at 90% stock, 10% cash. 
It contains ~25 stocks.

My strategy: I treat stock as business ownership and buy/sell according to the price vs value/future earning power.


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## mrPPincer (Nov 21, 2011)

Uranium101 said:


> Sorry to burst your bubble, but I think you did not beat the S&P500 index.


It's ok Uranium 
I finished the year with only 18.2% of my portfolio invested directly in the US markets, so the S&P is not my benchmark.


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## Causalien (Apr 4, 2009)

XIRR for 2013 on my total investment portfolio, excluding cash held for emergency and spending: 516%

It was easy to calculate for me since I did not touch my investments. Ironic that the best move I've ever done for my investments is to do nothing.

Because I know it sounds too good to be true and you are all a skeptical bunch. Let me reference my 2012 investment thread:

http://canadianmoneyforum.com/showthread.php/14435-What-were-your-Investment-returns-for-2012?p=162764&viewfull=1#post162764

Here is my 2011 investment thread where I had only a meager 1% gain:
http://canadianmoneyforum.com/showthread.php/9894-2011-Returns?p=104228&viewfull=1#post104228

Recap: TSLA, BAC, V

Happy new year


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## Uranium101 (Nov 18, 2011)

mrPPincer said:


> It's ok Uranium
> I finished the year with only 18.2% of my portfolio invested directly in the US markets, so the S&P is not my benchmark.


Well, why compare to an inferior index than the S&P500? Since we have the ability to invest directly into this index, why choose to buy into something inferior? If one can not beat this index, then just join it lol.


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## Uranium101 (Nov 18, 2011)

Causalien said:


> XIRR for 2013 on my total investment portfolio, excluding cash held for emergency and spending: 516%
> 
> It was easy to calculate for me since I did not touch my investments. Ironic that the best move I've ever done for my investments is to do nothing.
> 
> ...


I was in BAC too, then sold at $14.79 or something like that. I doubled my money on BAC before leaving, then shifted my money into IBM. Also sold others to join IBM such as MFC, CCO and SU.


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## mrPPincer (Nov 21, 2011)

^
reasons, such as lack of diversification risk etc.
why would anyone buy the S&P500 and only the S&P500 especially right now, is that what your portfolio is?
Anyways, the question was rhetorical, let's not derail here..


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## Uranium101 (Nov 18, 2011)

mrPPincer said:


> ^
> reasons, such as lack of diversification risk etc.
> why would anyone buy the S&P500 and only the S&P500 especially right now, is that what you're portfolio is?
> Anyways, the question was rhetorical, let's not derail here..


the S&P500 is very diversified. They have earnings across the globe. And investing into this index is very inexpensive. Whereas if you diversify using some International and Emerging market index funds, those costs are much higher.

I don't invest in index funds, I am a focused investor.


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## mrPPincer (Nov 21, 2011)

Uranium, in my way I'm a focused investor too although,
I'm a bit of a newb in the field of stock picking & monitoring but I feel I've done ok thus far.
Long run it's not gonna be my game really, I like to think, but I do see a little potential in some of the options strategies.
Right now I have a system that I stick to strictly, which acts as a way to kind-of effectively leverage my fixed income component when rebalancing, which I don't want to get into here right now, but it increases the difference in correlation to the equity component.

That said, I think when I hear anyone, myself included, talk 'system', 'strategies' etc in regards to the market, I start to see dark clouds gathering, which, now that I think of it, is probably why I've been pulling out so much cash lately, anyways, I seem to be rambling..

Happy NY all, don't drink and drive, 

What's your XIRR?


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## Echo (Apr 1, 2011)

My portfolio of Canadian dividend stocks was up 13.47% in 2013.


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## GoldStone (Mar 6, 2011)

Uranium101 said:


> the S&P500 is very diversified. They have earnings across the globe. And investing into this index is very inexpensive. Whereas if you diversify using some International and Emerging market index funds, those costs are much higher.


Uranium, have you ever heard of a balanced portfolio? The one that mixes uncorrelated asset classes? Equities, Bonds, Cash, REITs, Commodities, etc. 60% equities, 40% bonds is the most common balanced portfolio allocation. S&P500 is a totally wrong benchmark for a balanced portfolio.

I am kinda surprised that we have to rehash this. It's a very basic concept.


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## Uranium101 (Nov 18, 2011)

GoldStone said:


> Uranium, have you ever heard of a balanced portfolio? The one that mixes uncorrelated asset classes? Equities, Bonds, Cash, REITs, Commodities, etc. 60% equities, 40% bonds is the most common balanced portfolio allocation. S&P500 is a totally wrong benchmark for a balanced portfolio.
> 
> I am kinda surprised that we have to rehash this. It's a very basic concept.


No such thing as balanced portfolio. This concept was created by academia with centuries of research to suggest that diversification is key to successful investing. This notion derived from mathematics. However, after Ben Graham came around, a new school of investors were born. Although this group is still the minority, but the success rate from this group is super high. More than 90% of the investors out there follow the conventional wisdom taught to them by business schools around the global. The track record for this group is horrible. I have taken couple of finance/investing courses back in University days.

With that said, let me give you a logic, see if you can understand it. Over the course of 30 years, which asset class performed better? Equities, Bonds, REIT's, GIC, Commodities, Cash, and etc...
I am sure we all know it was equities. If you agree here, then we can continue. If not, you should stop reading because whatever I am going to say will make no sense to you.
Why put 40% of your money into an inferior asset class? Is it because your time horizon is short? That is why you care about volatility? The whole notion of diversification into other asset classes is to minimize volatility. According to Warren Buffett, volatility is not risk. Risk comes from what you don't know what you were doing.

http://www.youtube.com/watch?v=_RVaIkGnFu4 Fast forward to 3:28 to see their discussion on business schools.

Although Buffett and Munger did not say this in the video, but here is what they have always said: "I would rather get 15% with volatility, than 10% return with no volatility". They have said in their annual report that volatility is NOT risk.

As for why we should compare ourselves to the S&P500 index and ignore the others? Well, other Indexes were created by financial institutions with the intention of earning more fees. If you compare all indexes (and there are like millions of them), see if you could discover an index that beat the S&P500 over a 30 year period. Most indexes were created in recent decade. Since we have the luxury of investing directly into the S&P500 index, why diversify into other inferior indexes like the International or Emerging market? Although the S&P500 index have reached its all time highs, but if you have 30 year horizon, it will still beat whatever bond index you are going to invest in.

Does it make sense?


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## GoldStone (Mar 6, 2011)

Uranium, you are trying to convince me that your investment strategy (concentrated 100% equity) is better than mine (balanced approach). That's fine, and I understand your arguments. But that's a separate discussion, not related to portfolio benchmarking. 

Every investor should use a benchmark that matches their chosen investment strategy. S&P 500 is the right benchmark for your strategy. S&P 500 is a wrong benchmark for me, because I run a balanced portfolio. Many retired folks are heavily into fixed income. Should they benchmark themselves to S&P 500 too? Obviously not.



Uranium101 said:


> No such thing as balanced portfolio.


Sorry, but that's just nonsense.


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## Causalien (Apr 4, 2009)

I never went through the logic of figuring out why focused investing. Just reached the current style from experience and refining the strategy. But thanks Uranium for spelling it out.

Somewhere along the line, I remember reading about valuation metrics. on how it's created by the financial industry to be used to persuade people to whatever cause they are pushing. After 2008 and seeing that the safest institutions out there are gyrating like a penny stock. I realized that this is true. Hence, the middle finger to all valuation based teaching.


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## Uranium101 (Nov 18, 2011)

GoldStone said:


> Uranium, you are trying to convince me that your investment strategy (concentrated 100% equity) is better than mine (balanced approach). That's fine, and I understand your arguments. But that's a separate discussion, not related to portfolio benchmarking.
> 
> Every investor should use a benchmark that matches their chosen investment strategy. S&P 500 is the right benchmark for your strategy. S&P 500 is a wrong benchmark for me, because I run a balanced portfolio. Many retired folks are heavily into fixed income. Should they benchmark themselves to S&P 500 too? Obviously not.
> 
> ...


No idea why you would compare yourself to an inferior benchmark. I guess it makes people feel better when they lag behind the the superior index. I know a fund manager (but he doesn't know me) that is very smart, and follows the value investing approach. His fund's mandate was to find undervalued stocks across the globe. Well, his picks were good, and his performance were great (before fees). The fee structure is 3% on managed assets plus trading fees, plus 20% performance fee. His picks beat the S&P500 index overall before fees; however, after taking fees into account, it lagged behind the index. He still got the 20% performance fee because he shifted from benchmarking the S&P500 to S&P TSX. The worst part is that more than 90% of his stocks are in the S&P500 index and the DJIA. 
Now you see my argument here. In my mind, if you can't beat the S&P500 index, you are not fit to claim to be anything; however, if you can beat this index by buying a piece of garbage, then you are a hero in my book. That means you can still invest in bonds when they are cheap in comparison to stocks. This motion will be able to help you beat it in the right time. 

He is young and smart, and he came from the respectful value investing (Ben Graham, Warren Buffett) branch, but he is putting his self interest ahead of his investors' interest.


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## Uranium101 (Nov 18, 2011)

Causalien said:


> I never went through the logic of figuring out why focused investing. Just reached the current style from experience and refining the strategy. But thanks Uranium for spelling it out.
> 
> Somewhere along the line, I remember reading about valuation metrics. on how it's created by the financial industry to be used to persuade people to whatever cause they are pushing. After 2008 and seeing that the safest institutions out there are gyrating like a penny stock. I realized that this is true. Hence, the middle finger to all valuation based teaching.


Teehee, I know what I am doing that is why the chance of me getting hit by a bankrupting company being in my portfolio is small. Hence, how many companies in the S&P500 index went busted back in 2008? If there is even 10, the odds is like 10/500.
For the purpose of this discussion, I am not telling people to focus their money into 1 or 2 stocks. They only need to invest in the S&P500 index to achieve good return.


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## GoldStone (Mar 6, 2011)

Uranium101 said:


> No idea why you would compare yourself to an inferior benchmark.


One more time: I run a balanced portfolio. 60% stocks, 40% bonds. I split stocks equally, 20% Canada, 20% US, 20% International. The right benchmark *for me* is a blend of:

40% Canadian Bond Index
20% TSX Composite Index
20% S&P 500 Inxex
20% EAFE Index

It doesn't matter one bit what you think about my strategy. Your opinion about my strategy is completely irrelevant. I have to use a benchmark that matches the strategy.

------

Just so you feel a bit less smug, here are the performance numbers from 1970 to the end of 2012.

40/20/20/20 Benchmark
Average Gain (Geometric): 9.865%

100% S&P 500
Average Gain (Geometric): 9.734%

My "inferior" balanced benchmark outperformed your "superior" benchmark over the long haul.


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## Uranium101 (Nov 18, 2011)

GoldStone said:


> One more time: I run a balanced portfolio. 60% stocks, 40% bonds. I split stocks equally, 20% Canada, 20% US, 20% International. The right benchmark *for me* is a blend of:
> 
> 40% Canadian Bond Index
> 20% TSX Composite Index
> ...


I will have to audit the numbers you have provided. The source of such information may be bias. The 100% S&P500 index data sounds about right, but your mixed index 40/20/20/20 data is questionable. Are you able to provide the exact indexes that derive from your 40/20/20/20? I will look into this and hopefully I am able to point out some calculation errors. The thing with 40/20/20/20 is that you will need to re-balance every year, and that tends to distort reality. If the data is correct by sticking to and rebalancing 40/20/20/20 is able to beat the S&P500 index, then I will reconsider my proposition.

Last question, were dividends and interest payments re-invested in your data?


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## GoldStone (Mar 6, 2011)

Uranium101 said:


> I will have to audit the numbers you have provided.


Please.

I used Norm Rothery's Asset Mixer to calculate the returns:

http://www.ndir.com/cgi-bin/downside_adv.cgi

The Asset Mixer tool uses the historic returns maintained by Norbert Schlenker:

http://libra-investments.com/Total-returns.xls

The spreadsheet provides the references to the sources of data.

The return numbers are total returns, dividends included.


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## olivaw (Nov 21, 2010)

*2013 XIRR: 10.32%*
*2012 XIRR: 6.27%*

My portfolio is a balanced blend of 50% stocks, 50% bonds/cash. I'll accept lower returns to reduce volatility.

With new deposits, my portfolio increased by 24.6% in 2013.


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## Uranium101 (Nov 18, 2011)

GoldStone said:


> Please.
> 
> I used Norm Rothery's Asset Mixer to calculate the returns:
> 
> ...


Thanks, I have looked at the numbers and they are bias at best. I won't spend the time pointing out the mistakes because it will take heck a lot of time, which I don't have. Even if I pointed them out, there will be tons of discussions between us. I did not accumulate my wealth by arguing with people (well, technically I argue against talking heads on TV all the time, that is why I doubled my money in less than 3 years). 

I wish you the best. You will do just fine in investing by following the academia route, but I would advise to pay no attention to financial models. We are following a different path, that is why we have so many disagreements. All the best.


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## jcgd (Oct 30, 2011)

I did well this year. My RRSP XIRR is 29.6%. Pulled off a whopping 51% on money actually invested. I had a chunk of cash that put a drag on my returns. I'm still happy!
Last year XIRR was 12%.


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## m3s (Apr 3, 2010)

2013 XIRR overall 13.14%

USD stocks/foreign ETFs in RRSP charged away with 27.7%, TFSA dragged along with a few untimely Cdn buys, and non-reg was in the middle. Good enough for a year on auto-pilot.

Basic strategy is 5-10 CAD stocks in TFSA, 5-10 USD stocks in RRSP and a few Vanguard USD ETFs for foreign exposure. Still +30% cash even though target is 10-20%


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## doctrine (Sep 30, 2011)

2013 XIRR of 42% in my all-Canadian non-registered portfolio. A couple big winners but also avoided any big losers (nothing down more than 15%). My biggest holding 1 Jan 2013 was ACQ and it returned almost 200% and thus is still my biggest holding.


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## Jungle (Feb 17, 2010)

2013 XIRR one big account up *+21.72%* ! (benchmark 18.19%) 
56/30/9.5/4.5 cad/us/int/fi

2013 Networth up +26.64%
Spending down -6% ($22,065 but does not including mortgage) 
Housing up 6.4% but gains not included in net worth due to housing bubble

Milestones: 
Crossed a net worth over 500k
Made more in stock market than my gross income
First whole portfolio double and then some to 124%

The good:
CAD stocks easily outperformed the TSX 

The bad:
US stock selection underperformed the S&p500
No international fund in RSP or TFSA-there was big gains in VEA this year. 
Spent $1000.00 on trading costs and transfer accounts fees, but did get a free ipad and 10 free trades

Action plan:
Watch trading costs 
If I keep underperforming the US market, I will just use an index fund for US exposure










We have portfolios from 2001 but unfortunately I don't have data from 2007-2009 for RSP and TFSA and I only have XIRR for all accounts starting in 2010.


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## Causalien (Apr 4, 2009)

Seems to me everyone is doing good. 20% return would sound like a dream even back in 2006. Let alone having almost everyone getting ~20% returns.

In my opinion, moving forward, the primary focus of every investor/trader should be on whether or not the music has stopped.


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## Xoron (Jun 22, 2010)

For 2013, my XIRR for my RRSP and TFSA combined is *24.83%*. My target asset mix is:

Bonds: 5%
CAD Equities: 32.5%
USD Equitiies: 32.5%
International: 30%


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## KrissyFair (Jul 8, 2013)

Nice returns this year everyone!!

16.65% here which I'm incredibly happy with given I've got a higher bond weighting than I want and I started trying my hand at options (ie that part of the portfolio dragged the rest down during the learning curve).


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## Canadian (Sep 19, 2013)

-6.48% in my TFSA and +16.74% in my RRSP. This was my first year investing in individual stocks so it was a big year of learning. I bought a couple REITs in my TFSA before the summer, so that's what has caused the bulk of this year's losses - I am still holding them though and plan to hold long term. I had also bought POT before the Ukrali drama. I have averaged down since and am almost back in positive territory. Most of my stocks are up though, which I'm happy about. What's funny is I haven't touched my RRSP this year - I am working on topping up / building my TFSA portfolio. I think 2014 will be a much better year for me. I've learned so much over the past year and I'm looking forward to applying my knowledge and continuing the journey.


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## m3s (Apr 3, 2010)

Canadian said:


> I had also bought POT before the Ukrali drama.


That was one of my untimely buys as well. If you are holding dividend stocks for the long term, then future years should certainly be easier with dividends growth etc.


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## Canadian (Sep 19, 2013)

I plan on holding indefinitely [unless something fundamentally changes] and adding to my position in the future. I figure I endured a lot of the pain this year [I hope lol].


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## cannadian (Dec 30, 2011)

2013 Investing Returns: 43.1%

Nice name by the way^^


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## HaroldCrump (Jun 10, 2009)

Uranium101 said:


> Sorry to burst your bubble, but I think you did not beat the S&P500 index.


Apparently, neither did Warren Buffet this year.
For only the 3rd or 4th time since 1964.


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## cannadian (Dec 30, 2011)

HaroldCrump said:


> Apparently, neither did Warren Buffet this year.
> For only the 3rd or 4th time since 1964.


Isn't Berkshire up 32-33% this year vs S&P500 gain of 29%?


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## HaroldCrump (Jun 10, 2009)

cannadian said:


> Isn't Berkshire up 32-33% this year vs S&P500 gain of 29%?


I confused the exact details of the news.
Berkshire is missing the 5yr. target for beating the S&P 500 for the first time, not the yearly return.

http://business.financialpost.com/2014/01/02/warren-buffett-berkshire-sp500/


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## cannadian (Dec 30, 2011)

HaroldCrump said:


> I confused the exact details of the news.
> Berkshire is missing the 5yr. target for beating the S&P 500 for the first time, not the yearly return.
> 
> http://business.financialpost.com/2014/01/02/warren-buffett-berkshire-sp500/


Ahh thank you. It will be interesting to see what he says about that in his 2013 letter to the shareholders...


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## GoldStone (Mar 6, 2011)

HaroldCrump said:


> I confused the exact details of the news.
> Berkshire is missing the 5yr. target for beating the S&P 500 for the first time, not the yearly return.
> 
> http://business.financialpost.com/2014/01/02/warren-buffett-berkshire-sp500/


IMHO, Berkshire underperformance in a strong bull market is fully expected. They have grown way too big. Their cash pile is what... 20 billion? 40 billion? Buffett's hands are tied. He has to play in the megacap space. Mid- and small-caps are effectively off limits to him.

He may still outperform the S&P 500 over a full business cycle. Berkshire portfolio of businesses is very conservative. Less upside, less downside.


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## Franky Jr (Oct 5, 2009)

XIRR 18.4%, vs my equivalent benchmark of ~17%. (50cad/36us/9int/5fi)


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## cannadian (Dec 30, 2011)

GoldStone said:


> IMHO, Berkshire underperformance in a strong bull market is fully expected. They have grown way too big. Their cash pile is what... 20 billion? 40 billion? Buffett's hands are tied. He has to play in the megacap space. Mid- and small-caps are effectively off limits to him.
> 
> He may still outperform the S&P 500 over a full business cycle. Berkshire portfolio of businesses is very conservative. Less upside, less downside.


Sounds like he's probably having nowhere near the amount of fun in the market as he had when he was younger and could invest in small-mid cap stocks where all the fun's at.

You're absolutely right that a ballooning capital base will necessarily drag on your return. As Buffett says, he can only hunt elephants now!


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## briant (Jun 23, 2009)

Just calculated my 2013 rate of return and it's happily sitting at 22.72%! :encouragement:
My target allocation is 25/25/25/25 in Canadian/US/Intl/Emerging indexes. Thanks for all the help fellow couch potatoes, you guys rock!


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## daddybigbucks (Jan 30, 2011)

16.6% overall putting all my accounts together.
Anything over 15% and i'm happy.


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## BoringInvestor (Sep 12, 2013)

2013 XIRR = 15.55%.

I follow a couch potato portfolio, and will provide the details on this return on my money diary thread:

http://canadianmoneyforum.com/showthread.php/16247-Couch-potato-lazy-portfolio-tracking-my-progress


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## andrewf (Mar 1, 2010)

GoldStone said:


> IMHO, Berkshire underperformance in a strong bull market is fully expected. They have grown way too big. Their cash pile is what... 20 billion? 40 billion? Buffett's hands are tied. He has to play in the megacap space. Mid- and small-caps are effectively off limits to him.
> 
> He may still outperform the S&P 500 over a full business cycle. Berkshire portfolio of businesses is very conservative. Less upside, less downside.


Is thus true? Can't Berkshire always buy shares in Berkshire? If Berkshire could generate higher returns by investing in mid-caps, shouldn't Berkshire be shrunk down to the size where it can efficiently do so? Empire building is not often in the interest of shareholders.


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## richard (Jun 20, 2013)

andrewf said:


> Is thus true? Can't Berkshire always buy shares in Berkshire? If Berkshire could generate higher returns by investing in mid-caps, shouldn't Berkshire be shrunk down to the size where it can efficiently do so? Empire building is not often in the interest of shareholders.


That's the problem with brilliant stock picking. Once the secret is out you lose a lot of advantages. We know that Buffet is good but everyone else does too so it's not likely that we'll be able to earn higher returns from our knowledge.

Attempting to buy out shareholders might be difficult since the type of people who buy Berkshire shares are probably very resistant to selling. They could simply declare a large one-time dividend to get rid of cash and shrink the company. I'm not sure what would happen after that since the demand to buy shares in a smaller Berkshire would be many multiples of the supply, possibly even more than the hottest tech IPOs. Given that Buffet could go back to earning higher returns the share price might be driven up to the point where there's no difference. 

And given Buffet's nature and age I suspect that the advantages of having a cash stockpile big enough to bail out large companies might outweigh the loss of investment options for him. If you can find the next Buffet you'll do well


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## andrewf (Mar 1, 2010)

Rising Berkshire prices/multiples are good for shareholders. You say it like it's a bad thing. Berkshire shouldn't be worrying about being affordable for non-owners to buy.


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## Greyhound86 (Feb 21, 2010)

15.9% 

Canadian dividend stocks mostly.


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## BID-LOW (Jan 7, 2014)

Did well with

Clearwater Seafoods (CLR) up 20.12% Still Hold But with a stop loss set at $7.75

Western Forest Products (WEF) up 15.76% Still Hold But with a stop loss set at $1.82

Canadian Tire REIT (CRT.UN) up 8.28% Still Hold No Stop Loss (Long Term Hold!) ****Drip Attached****

I bought them Oct & Nov 2013


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## LOST (Aug 30, 2010)

Was just wondering. What is XIRR and how is it computed?


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## Jungle (Feb 17, 2010)

XIRR is an excel function that uses time weighted cash flows to calculate your annual investment returns. It's an ideal calcualtor when you've made contributions at different times. The alternative measure(simple return) will not factor in the time weighted portion. Simple return can get complicated and unaccurate when not factoring in contrbutions made at different times. Especially if the market is volitile. XIRR saves the day and figures all this out. Returns are annualized and appear to be inline with industy standards. 

Google XIRR or youtube to learn how to set it up. It's pretty easy once you get used to it.


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## hboy43 (May 10, 2009)

Hi:

Another fantastic year. ROE about 35%, ROA about 28%.

My benchmark is 7%. You read that correctly, I don't care what S&P or TSX does any particular year compared to what my portfolio does. If I can average 7% annually on my money over decades, then that will be most excellent. Don't much care what individual years do. Lifetime I seem to be over that benchmark.

Made zero trades in 2013. Last trade was fall 2012.

Big winner last year was Methanex, a stock I have held for about 15 years and purchased at prices in the range of $4 to $27 with an ACB currently $14. I have sold some in the mid 20s at times to rebalance which in hindsight is unfortunate. It accounted for about 28% of the return last year due to it rising 98% in 2013.

As it is my intention to buy low and sell high, my investing moves last year were entirely of the nature of paying down margin debt. I consider markets neither so low as to be buying nor so high as to be selling. A time to sit on my hands. 

This is not to say that a young person starting out should not buy equities, just that I with zero fixed income and margin leverage is best served by paying down debt at this time. If the SHTF again like 2008 in my lifetime, I want to be better prepared than I was last time.

I look forward to another year of doing mostly nothing.

Cheers and all the best for 2014.

hboy43


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## Electric (Jul 19, 2013)

If I take the total market value of my RRSP, TFSA and unreg account on Dec 31/12, and merge all the deposit/withdrawal records, and enter the closing market value on Dec 31/13, I get an XIRR of 24.7%. Is this the most meaningful way to calculate my return, i.e. should I be merging all the accounts or do I need to keep the accounts separate? 

Also, I made some in-kind transfers from my unreg account into my RRSP/TFSA; I deleted all these from the deposit/withdrawal records beforehand. Is that correct?


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## Synergy (Mar 18, 2013)

Electric said:


> If I take the total market value of my RRSP, TFSA and unreg account on Dec 31/12, and merge all the deposit/withdrawal records, and enter the closing market value on Dec 31/13, I get an XIRR of 24.7%. Is this the most meaningful way to calculate my return, i.e. should I be merging all the accounts or do I need to keep the accounts separate?
> 
> Also, I made some in-kind transfers from my unreg account into my RRSP/TFSA; I deleted all these from the deposit/withdrawal records beforehand. Is that correct?


You can structure your spreadsheet so you can get a total return for all your accounts combined and a return for each account separately. See info provided by GoldStone:
http://canadianmoneyforum.com/showt...calculate-XIRR?p=213342&viewfull=1#post213342

You can also add multi-yr total returns as in post #4 of that thread.


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## GoldStone (Mar 6, 2011)

Electric said:


> Also, I made some in-kind transfers from my unreg account into my RRSP/TFSA; I deleted all these from the deposit/withdrawal records beforehand. Is that correct?


Shouldn't matter, if you track your accounts as one portfolio. A withdrawal from one account is a deposit into another account. They cancel each other when you calculate portfolio XIRR.


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## Electric (Jul 19, 2013)

They cancel eventually, but there is a 1 week lag between the withdrawal from my account at one broker and the deposit into the other, which messes up the time component of the XIRR calc. I guess I could back date the deposit.

What I am doing in my SS is very similar to the template you present, thanks for the suggestion. I have a tab for every account, with individual XIRRs, and then a tab where I combine all the transactions. Your way is pleasingly compact.


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