Re: KMyMoney2-IRR calculation - Request for feedback

[allan anderson]

>Hello all,
>I have been looking at some issues in the Annualized return
>calculation.
>I am not an expert on financial calculation, so I need your help on
>this.
>
>First, from your feedback in the past I know that the Annualized return
>works ok, at least for current year reports. Or at least, it works the
>same as Quicken, which is good enough for me.
>Going through it again, I think there may be issues with the
>calculation when the report involves transactions from previous years,
>and in some cases this may freeze KMyMoney.
>This is where I need your feedback.
>
>Have you tried using the Investment Performance report for multiple
>years? Have you validated the results and they seem to be accurate?
>If not, would you be willing to help me make it accurate?
>No need of programming skills, only financial. I will translate the
>code to plain English (or whatever language is better) so we can
>discuss the calculation and I will do the coding later (and place a big
>Thank you! note in the code to you).

Hi Alvaro

My programming skills are slight, matched by my financial skills.  So,
with that disclaimer....

I have made use of the IRR figures in the past, and have run reports
going back three years with no apparent problem.  But, when I just
tried to go back further, I do find kmm freezes.

It seems to be OK for me to about three years and two months, then it
runs into trouble.  I went back from today to 30 May 2005 OK, and 20
May OK, but 1 May freezes.  To see if it was related to particular
data, I the tried from 15 July 2007, and all seems OK back to 12 May
2004, but 11 May 2004 freezes.

Is this what you're looking at?

Allan

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[Alvaro Soliverez]

Hello allan,
This is exactly what I am looking at.

Freezes on one hand, possibly inaccurate results on the other.

What about the results of a 3-year report? Does it seem to be accurate?

Thanks for the feedback!

On Tue, Jul 15, 2008 at 3:07 PM, allan <aganderson@...> wrote:

>Hello all,
>I have been looking at some issues in the Annualized return
>calculation.
>I am not an expert on financial calculation, so I need your help on
>this.
>
>First, from your feedback in the past I know that the Annualized return
>works ok, at least for current year reports. Or at least, it works the
>same as Quicken, which is good enough for me.
>Going through it again, I think there may be issues with the
>calculation when the report involves transactions from previous years,
>and in some cases this may freeze KMyMoney.
>This is where I need your feedback.
>
>Have you tried using the Investment Performance report for multiple
>years? Have you validated the results and they seem to be accurate?
>If not, would you be willing to help me make it accurate?
>No need of programming skills, only financial. I will translate the
>code to plain English (or whatever language is better) so we can
>discuss the calculation and I will do the coding later (and place a big
>Thank you! note in the code to you).

Hi Alvaro

My programming skills are slight, matched by my financial skills.  So,
with that disclaimer....

I have made use of the IRR figures in the past, and have run reports
going back three years with no apparent problem.  But, when I just
tried to go back further, I do find kmm freezes.

It seems to be OK for me to about three years and two months, then it
runs into trouble.  I went back from today to 30 May 2005 OK, and 20
May OK, but 1 May freezes.  To see if it was related to particular
data, I the tried from 15 July 2007, and all seems OK back to 12 May
2004, but 11 May 2004 freezes.

Is this what you're looking at?

Allan

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[allan anderson]

> >Hello all,
> >I have been looking at some issues in the Annualized return
> >calculation.
> >I am not an expert on financial calculation, so I need your help on
> >this.
> >
> >First, from your feedback in the past I know that the Annualized return
> >works ok, at least for current year reports. Or at least, it works the
> >same as Quicken, which is good enough for me.
> >Going through it again, I think there may be issues with the
> >calculation when the report involves transactions from previous years,
> >and in some cases this may freeze KMyMoney.
> >This is where I need your feedback.
> >
> >Have you tried using the Investment Performance report for multiple
> >years? Have you validated the results and they seem to be accurate?
> >If not, would you be willing to help me make it accurate?
> >No need of programming skills, only financial. I will translate the
> >code to plain English (or whatever language is better) so we can
> >discuss the calculation and I will do the coding later (and place a big
> >Thank you! note in the code to you).  
>
> Hi Alvaro
>
> My programming skills are slight, matched by my financial skills.  So,
> with that disclaimer....
>
> I have made use of the IRR figures in the past, and have run reports
> going back three years with no apparent problem.  But, when I just
> tried to go back further, I do find kmm freezes.
>
> It seems to be OK for me to about three years and two months, then it
> runs into trouble.  I went back from today to 30 May 2005 OK, and 20
> May OK, but 1 May freezes.  To see if it was related to particular
> data, I the tried from 15 July 2007, and all seems OK back to 12 May
> 2004, but 11 May 2004 freezes.
>
> Is this what you're looking at?
>
> Allan

Hello allan,
This is exactly what I am looking at.

Freezes on one hand, possibly inaccurate results on the other.

What about the results of a 3-year report? Does it seem to be accurate?

Thanks for the feedback!
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Hi Alvaro

In the past, I've checked Quicken against a spreadsheet IRR and found
them to correspond, so what I've now done is check KMM against Quicken,
for the three years up to switching to KMM, 6 Dex 2006.

In three cases, the results are exactly the same, and the remainder
vary by between 0.4 and 1.7%.  Except, in just one case, where the
difference is 6%.  I've looked closely at this one, and it's not the
IRR calculation that is the problem, but the pricing.  The very first
few  prices I entered in KMM were obtained via on-line update from
Yakoo.uk, and they are noticeably higher than those from Quicken.  I
did notice this at the time and stopped using Yahoo, as it was using a
different price point.  So, I looked again, avoiding the date of my
switchover.

Taking the three years to Nov 2006, the problem prices now exactly
correspond.  Most of the rest, are now much closer, but with one or two
varying by about 2%.

I don't have time at the moment to dig deeper, but hope the above helps.

Allan


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[Alvaro Soliverez]

Ok.
So, if there is a problem, at least Quicken has it too.

All IRR formulas that I have found so far seem to be similar to the one we use. The problem might be in how we handle numeric values, maybe.

On Thu, Jul 17, 2008 at 2:01 PM, allan <aganderson@...> wrote:

> >Hello all,
> >I have been looking at some issues in the Annualized return
> >calculation.
> >I am not an expert on financial calculation, so I need your help on
> >this.
> >
> >First, from your feedback in the past I know that the Annualized return
> >works ok, at least for current year reports. Or at least, it works the
> >same as Quicken, which is good enough for me.
> >Going through it again, I think there may be issues with the
> >calculation when the report involves transactions from previous years,
> >and in some cases this may freeze KMyMoney.
> >This is where I need your feedback.
> >
> >Have you tried using the Investment Performance report for multiple
> >years? Have you validated the results and they seem to be accurate?
> >If not, would you be willing to help me make it accurate?
> >No need of programming skills, only financial. I will translate the
> >code to plain English (or whatever language is better) so we can
> >discuss the calculation and I will do the coding later (and place a big
> >Thank you! note in the code to you).
>
> Hi Alvaro
>
> My programming skills are slight, matched by my financial skills.  So,
> with that disclaimer....
>
> I have made use of the IRR figures in the past, and have run reports
> going back three years with no apparent problem.  But, when I just
> tried to go back further, I do find kmm freezes.
>
> It seems to be OK for me to about three years and two months, then it
> runs into trouble.  I went back from today to 30 May 2005 OK, and 20
> May OK, but 1 May freezes.  To see if it was related to particular
> data, I the tried from 15 July 2007, and all seems OK back to 12 May
> 2004, but 11 May 2004 freezes.
>
> Is this what you're looking at?
>
> Allan

Hello allan,
This is exactly what I am looking at.

Freezes on one hand, possibly inaccurate results on the other.

What about the results of a 3-year report? Does it seem to be accurate?

Thanks for the feedback!
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Hi Alvaro

In the past, I've checked Quicken against a spreadsheet IRR and found
them to correspond, so what I've now done is check KMM against Quicken,
for the three years up to switching to KMM, 6 Dex 2006.

In three cases, the results are exactly the same, and the remainder
vary by between 0.4 and 1.7%.  Except, in just one case, where the
difference is 6%.  I've looked closely at this one, and it's not the
IRR calculation that is the problem, but the pricing.  The very first
few  prices I entered in KMM were obtained via on-line update from
Yakoo.uk, and they are noticeably higher than those from Quicken.  I
did notice this at the time and stopped using Yahoo, as it was using a
different price point.  So, I looked again, avoiding the date of my
switchover.

Taking the three years to Nov 2006, the problem prices now exactly
correspond.  Most of the rest, are now much closer, but with one or two
varying by about 2%.

I don't have time at the moment to dig deeper, but hope the above helps.

Allan


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[allan anderson]

Hi Alvaro

I thought I'd better throw this in in case it helps.

I did a bit of checking between KMM and the XIRR function in OO.  I
just checked a couple of funds and the results were spot on in one, and
within 0.4% in the other.  Then, I realised that they both went over
three years without a freeze, 3 years and 11 months, in fact.

So, I did a bit more playing around with KMM.  Concentrating on one
fund, from opening on 4 Nov 2004 to today, the investment report worked
and produced a sensible result.  So, I went into the ledger and altered
the opening date from 4 Nov to 3 Nov, and KMM immediately froze.  The
report was still set to run from 4 Nov.  I could alter the ledger date
to 5 Nov and back to 4 Nov, without problem, but KMM froze each time I
set it to 3 Nov.

Then I tried a different fund.  This was opened 5 Dec 2001, and
produced a report for the whole period without problem!!!

So, why?  This fund has a series of regular monthly dividend payments,
whereas the other fund had an opening purchase, a second purchase two
months later, a reinvestment two months later, then six-monthly
dividends.

Anyway, some while later.......  Again, concentrating on the first
fund.....  If I set the report start date first, to an earlier date,
say 2001, then alter the ledger fund opening date to that same date, it
works, no freeze.

I'll see if it gets any clearer.

Allan

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