QUOTE(panasonic88 @ May 10 2013, 02:59 PM)
What took you so long.
Everyone has their own way of calculating the gain/loses. There is no right, there is no wrong.
Market slowed....
Now got time, plenty of time. Sorry to keep you waiting.
Buy share at 1.00
Share price now 1.50 and you sell at 1.50.
Dividends received for x years is 40 sen.
What's the gain?
Gain = Sell price + dividends - buy price = 1.50 + 40 - 1.00 = 90 sen.
Percentage gain = Gain / buy price = 90 sen / 1.00 =
90%.Using EGO boosting method by deducting dividends from cost of share.Gain = Sell price - cost of share.
Cost of share = 1.00 - 40 sen = 60 sen.
Gain = 1.50 - 60 sen = 90 sen.
Percentage gain = Gain / cost of share = 90 sen / 60 sen =
150%.One method shows 90% gain.
One method shows 150% gain.
No right no wrong?
Other scenario.Cost of shares = 1.00.
Company gives 10 sen shares each year.
Using deducting dividends method.
After 10 years, cost of shares = 1.00 - (10 years x 10 sen) = 1.00 - 1.00 = 0.
Question? How to count percentage gain on year 10?
Can we divide by zero?
Next question. Year 11. ( Long term investing hor)
Total dividends now = 1.10.
Cost of shares = 1.00
How to account this new cost at year 11?
Cost of shares become negative?
Too long jor ....