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Valuations are straightforward in a world without corporate actions like splits, consols, dividends etc. Most (all?) data providers rerate historical prices af
by ak39 3y ago
Valuations are straightforward in a world without corporate actions like splits, consols, dividends etc.
Most (all?) data providers rerate historical prices after corporate actions that affect prices and this is not really the correct way to do continuous valuations using the restated prices.
- jzombie 3y agoSome of them allow you to view adjusted vs. current pricing. Some of them also leave it up to the user to figure out if it's adjusted, so it does take some homework to figure out at times.
- ak39 3y agoIndeed. It's by no means "straightforward"
- stocknear 3y agoTrue, I forgot about the splits. But i still believe building a first version where the split is included is a good start for this feature. Later on we can add more advance features where we can turn on/off the split
- creer 3y agoFor what purpose do you want to ignore splits?
- ak39 3y agoI didn't say we should ignore splits. To reiterate: most third-party data providers include splits by restating historical prices. This only works if you want to analyse performance at individual stock level by ignoring holdings. But if you want to do performance analysis for your own portfolio of stocks, relying on restated prices is incorrect. Eg. If you bought say 10 stocks at the old price, you cannot take the restated historical price with your 10 stocks and you cannot take the units held of 10 stocks with the new prices. You have to account for this via transactions to increase your holdings (for splits) by leaving the prices historically the same.