You're a f**king idiot Big Easy

So what do you know, I looked in my book and had a client invest a 100k on 6/1 on a stock pick he heard on CNBC.  Should have known it didn't do sh*t for seven months, but the guy on CNBC said it was going to be bought out so I bought another 100k on 1/1.  Lo and behold the stock is up 6.5% today on a buyout and the deal is going to close in two months.  Great, I'll call my client tomorrow and tell him he made 12.9% on his money.

you idiots!!! if it were a $13,000 gain in 12 months it would be 6.5% return. Remeber we don’t know when the additional 100k was added to the account so this is only an approximation. It’s as close as we can get withou knowing all the facts. Here it is based on what we know.  6.5% /12 is .54% per mth. .54% * 10 mths = 5.4% annualized. Are you all that dumb??? I’m beginning to think a whole lot less of you. Who doesn’t get this?

You f**king idiot EZ, he said the additional 100k was invested on 1/1.  The guy made the investments on 6/1 and 1/1.  Today is March 23 roughly 10 months.  He made 6.5% in 10 MONTHS NOT TWELVE.  When you project an annualized return, the return should be higher not lower.  It is a PROJECTION, we’re not done with the 12 months yet. 

And for you EZ here is a link cut and paste

cgi.money.cnn.com/tools/returnrate/returnrate.jsp

The principal is the same.  For simplicity, put 200,000 for example on 6/1/05 and put 213,000 on 3/23/06.  You will get a Return for the Entire Period of 6.5% and an ANNUALIZED RETURN of 8.08%.  Now you owe the board an apology.

[quote=VotedforKerry]Indy, were you a former accountant at Enron?  Annualized return of 12.9%?  If you only used the 100k at 12.9% that is $12,900 or $100 short of the $13,000 he ended with and that's using 200k.  And you lost me on the average deposit, what did he invest in equities or mutual funds, or in your case a passbook savings account.  And if your clients accept those numbers they need their head examined...."flaws in the calculation" now that's understatement.  Break out the HP why don't you.[/quote]

VFK, you have been victimized by fuzzy math.  I am a CPA, but did not work for either Enron or Arthur Andersen.  The point is that the $13,000 was made in less than twelve months, so logic tells most folks that if the account continued at the pace it was averaging, at the end of twelve months, it would certainly make more than $13,000.  The entire 200K was not in the account during the entire period, hence the average balance was considerably lower (and I believe, pretty doggone close to the number I stated).

I will allow that my calculation does not take into effect the exact balance each and every day of the calculaton period (those numbers are unknown to all of us), so it is only a rough estimate, but by the time this string plays out, I think my number will be closer to the truth than yours.  At the same time, it is only an estimate.  I may have confused folks earlier, as I use the performance reports issued by my statement producer (LPL) for clients and I believe that it would be better for Scrim's bank to purchase a performance reporting package, rather than rely on estimate calculations like the one I described above.  I've used the estimate calculation for my own personal use when the performance reports weren't in hand.

BTW, it's been awhile, but my math SAT was 710, so I'm OK with numbers...

[quote=Big Easy Flood]

The reason that Indy may be very close is found in this thinking.

Any positive return earned in less than 1 year will result in a higher percentage if you annualize it.

Man it's scary to think that this many lightweights are in the biz.

[quote=joedabrkr] [quote=Big Easy Flood]

Man it's scary to think that this many lightweights are in the biz.

[/quote]

Yes and thanks so much for gracing us with your profound wisdom.....!
[/quote]

Why in the world would you want to be considered a lightweight?

[quote=VotedforKerry]

You're a f**king idiot Big Easy

[/quote]

Let me see if I have this right.  You voted for Kery, yet I am the idiot?

MindyOne, a CPA?  Please don't do my taxes, by your calculations I still owe the IRS $173,938. 

And for BIG WEEZY, Kerry has two R's.

[quote=Indyone]

BTW, it’s been awhile, but my math SAT was 710, so I’m OK with numbers…

[quote=VotedforKerry]

MindyOne, a CPA?  Please don't do my taxes, by your calculations I still owe the IRS $173,938. 

And for BIG WEEZY, Kerry has two R's.[/quote]

The longer you post on this, the dumber you look.

Indyone, I stand corrected.

www.sironix.com/ratecalc.htm  Plug in the numbers and you get a simple return on investment of 6.5% and a 12.9% annual rate of return.

VFK, I respect you for admitting that.  I looked at the calculator and am bookmarking it for simple internal use calculations.  Thanks for sharing it.  Scrim, your bank should still look at purchasing performance reporting software, as the website can only take a maximum of four entries.  Regardless, I would want something in-house that I could control...never know when that website disappears or becomes a pay site...

You reap what you sow.  So I need to eat a bit of humble pie on this one.  In this case, I should eat the whole pie.

SCORE: INDYONE 1 VFK 0

I was also incorrect. That’s what I get for responding after 4-5 glasses of wine. My apologies.

[quote=ezmoney]I was also incorrect. That's what I get for responding after 4-5 glasses of wine. My apologies.[/quote]

A few glasses of wine makes you forget that a year has twelve months?

4-5 glasses of wine really impares my judgement. For example I should have never responded to this post without some real thought to the question.

BTW, a year in this biz feels like a heck of a lot more than 12 months.

[quote=ezmoney]I was also incorrect. That's what I get for responding after 4-5 glasses of wine. My apologies.[/quote]

Not a problem...we can all consider this a good learning experience.  I've been on the receiving end of a losing battle before on this board...and had to eat some pie myself...best thing that can happen to keep a person humble...just keep that wine thing for after hours, OK?