I see your point, but what's your suggestion? I don't think that the actual information on Advanced Portfolio are useful to take a decision on the investments because there is no information considering the duration of the investments. And for me this is the main missing feature in gnucash compared to the product I was using before. Do you agree?
Franco On Mon, Jan 10, 2011 at 5:54 PM, Donald Allen <[email protected]>wrote: > On Mon, Jan 10, 2011 at 11:38 AM, Franco Mossotto > <[email protected]> wrote: > > Yes, > > you are right, IRR can be misinterpreted because it assumes reinvestments > > with the same return rate, but this is anyway widely used and is present > on > > other products. > > What Prof. Baker is pointing out is that you can be fooled by IRR > comparisons, which are dependent on the shape of the NPV v. discount > rate curves (concave v. convex). If you are comparing situations where > large costs/outgoing flows occur late in the game, it can be the case > that inferior investments have higher IRRs than superior ones. If you > don't look at the NPV/discount rate curve, you might not know this and > make an incorrect decision, by assuming blindly that a larger IRR is > always better, which is not true. > > /Don > > > > NPV can be easily added starting from my code (we just need to add an > option > > to take the rate to calculate NPV, and add the column), but I think this > is > > more complex to use since it requires to think first to which is the > > expected return rate. > > Regards, > > Franco > > > > > > On Mon, Jan 10, 2011 at 4:42 PM, Donald Allen <[email protected]> > > wrote: > >> > >> On Mon, Jan 10, 2011 at 3:22 AM, Franco Mossotto > >> <[email protected]> wrote: > >> > I was looking for the ability in gnucash to calculate the IRR > (Internal > >> > Rate > >> > of Return) for investments. This is something that other products has > >> > and > >> > that I found essential in order to evaluate the investments in my > >> > portfolio. > >> > >> IRR is certainly useful, but can be misinterpreted. See > >> > >> http://hadm.sph.sc.edu/courses/econ/invest/invest.html > >> > >> I realize that what I've said here is a bit off-topic, but since > >> Professor Baker explains the issues very clearly, I thought I'd > >> mention it. > >> > >> /Don > >> > >> > I've found some old request to add this capability on the advanced > >> > portfolio > >> > report, but I didn't find any implementation for that. > >> > > >> > I've tried doing that by myself on 2.2.7 that is the version I'm > >> > currently > >> > using. > >> > > >> > Attached there are my scm version and the patch file for 2.2.7. It > >> > works, > >> > even if this probably doesn't comply with your coding standards (this > is > >> > my > >> > first implementation using Scheme) > >> > > >> > I was trying to port it on trunk, but I've some issues with advanced > >> > portfolio shipped on 2.4.0 that I need to investigate first. > >> > > >> > Regards, > >> > Franco > >> > > >> > _______________________________________________ > >> > gnucash-devel mailing list > >> > [email protected] > >> > https://lists.gnucash.org/mailman/listinfo/gnucash-devel > >> > > >> > > > > > > _______________________________________________ gnucash-devel mailing list [email protected] https://lists.gnucash.org/mailman/listinfo/gnucash-devel
