It's the calculations that counts.. !!

Hmmm ... remember this blog posting: It's the business.. Part IV

Let me show something really interesting...

• Remember I mentioned that if an investor made an investment into Yi-Lai at a cost of 1050 back in 2003, the investor would have received 450.00 in dividends and I went on to calculate in the following manner.
  
  So from an investment outlay of 1050, the investor would have gotten a 450.00 in dividends or 43% back of their investment outlay. Which means that the investor current holding cost of Yi-Lai is 600.00.
  
  Currently Yi-Lai last traded at a share price of 1.30. Which means the investor is holding on to an investment gain of 117%!!!
  
  Which works to an annual compounded return of 29.4% for holding this investment for 3 years!!!

Did everyone realise that I am really cheating here?!

LOL!!!!!

Ah... let me show why. The invested capital is 1050. The return in dividends is 450.

Current market price = 1.30.

Current market price + dividends received = 1300 + 450 = 1750. Or a 'current' gain of 67%. (and not 117%!!!)

Which works out to a mere 18.56% compounded annual return for holding the stock for 3 years.. and not 29.4%.

See how I managed to glorified everything when I deducted the dividend received from my investment cost?

Ahh.... do you notice that Insider Asia write-ups... and do you notice how they deduct the dividends received from their investment cost?

The below is the snapshot of their portfolio published...

See how they have their 5,000 shares of Yi-Lai 'purchased' in 2003 has an average cost of a mere 61.5 sen?

And by doing so.... lol.... it just makes everything look so much nicer.... :p

Ahem.... it'sthe calculations that counts.. !!!