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Stock Review Keywords
Spot/Diversity Return: Return on investment, if investor had kept invested money throughout the period.
APS Return: Return on investment, if investor had taken out and put back money according to APS recommendations.
MUF(Money Utilization Factor): This parameter determines how long investor's money was blocked in the market. For Spot investment it is 100% while for APS it could be 0 to 100
Example 1: PNB has Spot return 44% for 5 years (1st April 2008 - 31st March. 2013) while APS investors have gained just 40% during the same period. However, APS blocked the money (MUF) less than 50% of the time. So, rest 50% (2.5 years) money was free to be utilized anywhere. Assuming it was in savings account which accrued 6% interest then it has total interest of 15% in 2.5 years. Hence, we can say APS has net return of 55% (40 + 15) in PNB which is much better than spot return.
Example 2: Bharti Airtel has lost nearly 28% during 5 year period (1st April 2008 - 31st March. 2013). During the same time period APS investors have lost nearly 24%, 4% less than the actual. MUF is 20% for the same. It means money was free nearly 4 years in case of APS investors. So, simple savings account interest calculation shows APS investors would have got 24% interest from savings account during those 4 years. Hence APS investors have net 0% loss for Bharti Airtel while regular investor has 28%.
Effective Return: Effective return is theoretical calculation based on APS return and MUF. Example. If a stock has yielded 70% return in 5 year with MUF 50% it means, this would have yielded 140% (Effective Return) provided we would have rotated the money in similar opportunity all the time. Practically it may not be possible. However, this figure gives overall picture how fast money grew during the investment period.
Example: Tata Power has yielded 37% for APS investors during 5 year period (1st April 2008 - 31st March. 2013) and Ambuja Cement has 66% during same time period. It appears that Ambuja Cement was better investment than Tata Power unless we put lens of "Effective Return" across them. MUF for Tata Power is 20% while for Ambuja Cement it is more than 80%. Hence, Effective return for Tata Power is around 170% while for Ambuja Cement it is just 78%. See APS investment graph for both it will clarify this concept better.
Investment Position:This tells the status of current APS investors for this stock.
Stock Health: This is color coding of stock health which we provide to all APS subscriber as periodic report.
Dark Green: Growth is better than average or better than expectation.
Green: Stock is on growth path but below average
Yellow: Stock is at indecisive state.
Pink: Stock is losing momentum and this could be early sign of downward trend.
Red: Stock has given enough signals for downward movement. Investors are recommended to get out immediately
Re-Entry Opportunity Date: Investors can invest anytime when stock is ramping up. However, it is better value proposition if they enter at first signal of investment. These dates are similar to entry point and best suited to enter if missed earlier.
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