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CAGR is normally calculated on a portfolio rather than on an
individual stock. It's best done in Excel after the results of trades
are known.
http://office.microsoft.com/en-us/excel/HP011225061033.aspx
TradeSim does a version of CAGR, but it is different from the CAGR
found in back testors designed for testing portfolios picked using
fundamental and quantitative analysis.
If you want to see how that's done read Motley Fools mechanical
investing forum.
Super
--- In equismetastock@xxxxxxxxxxxxxxx, lopez abduch <lopezabduch@xxx>
wrote:
>
> Hi Preston,
>
> Thanks for your help. I asked the question because I went to
investopedia. So, I thought that it could be applied to MS.
> In fact, there's another one better than CAGR which is Risk adjusted
CAGR. (It is also mentioned at investopedia.com).
>
> The other thing that I was very interested in knowing if it is
possible to do it for MS is the sortino rate.
>
> Think that all these tools can help us in order to choose for 1
stock or another.
>
> Thank you again.
>
>
> pumrysh <no_reply@xxxxxxxxxxxxxxx> wrote:
Lopez,
>
> Don't remember this ever having been written before so it will have
> to be written from scratch.
>
> Let's get started by an explanation first.
> Maybe we can get some others to jump in and help here as well.
>
> From Investopedia:
> The year-over-year growth rate of an investment over a specified
> period of time.
>
> The compound annual growth rate is calculated by taking the nth root
> of the total percentage growth rate, where n is the number of years
> in the period being considered.
>
> CAGR isn't the actual return in reality. It's an imaginary number
> that describes the rate at which an investment would have grown if
> it grew at a steady rate. You can think of CAGR as a way to smooth
> out the returns.
>
> Don't worry if this concept is still fuzzy to you - CAGR is one of
> those terms best defined by example. Suppose you invested $10,000 in
> a portfolio on Jan 1, 2005. Let's say by Jan 1, 2006, your portfolio
> had grown to $13,000, then $14,000 by 2007, and finally ended up at
> $19,500 by 2008.
>
> Your CAGR would be the ratio of your ending value to beginning value
> ($19,500 / $10,000 = 1.95) raised to the power of 1/3 (since 1/# of
> years = 1/3), then subtracting 1 from the resulting number:
>
> 1.95 raised to 1/3 power = 1.2493. (This could be written as
> 1.95^0.3333).
> 1.2493 - 1 = 0.2493
> Another way of writing 0.2493 is 24.93%.
>
> Thus, your CAGR for your three-year investment is equal to 24.93%,
> representing the smoothed annualized gain you earned over your
> investment time horizon.
>
> Preston
>
> --- In equismetastock@xxxxxxxxxxxxxxx, lopez abduch
> <lopezabduch@> wrote:
> >
> > Hi,
> >
> > Does anybody know how can I create a formula for metastock for
> CAGR (Compound Annual Growth Rate)?.
> >
> > Thanks in advance.
> >
> >
> > ---------------------------------
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> Mobile. Try it now.
> >
> > [Non-text portions of this message have been removed]
> >
>
>
>
>
>
>
> ---------------------------------
> Be a better friend, newshound, and know-it-all with Yahoo! Mobile.
Try it now.
>
> [Non-text portions of this message have been removed]
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