Modeling and personal investments

Just curious, How many of you builds financial models for the purpose of evaluating your personal investments? I am personally too lazy to build full blown models, but I’ve built simple, back-of-the-envolope type models in a couple occasions. What do you do in evaluating securities for your personal investment? Do you think its worth the time at all to model things out?

Bad idea. Save it for work and enjoy the rest of your life.

I vote good idea and it’s time well spent. However, they don’t need to be sexy like dealmaven, etc. Oh… and I make models for other things other than just individual stocks. I did a huge “life model” monte carlo simulation that was actually life changing. On the other hand, my equity & asset portfolio capm models are 100% worthless.

What kind of models are you guys talking about? Could you post a screen shot? I have a simple excel spreadsheet that tracks my actual weighted asset class exposure (Roth 401k + Roth IRA), but that’s about it. Individual stocks are only 10% of my portfolio so I don’t need anything too fancy.

I prefer to sleep with models.


My firm has a modelling-heavy process. When it comes to PA dealing, it’s driven wholly off sentiment and/or casual observation. Well, occasionally I take an idea from work, but more often than not I’ll just be like “people are so negative on Pharma, and the stocks have fallen a lot. I’ll pick some up.” My best (luckiest?) stock pick was Apple, after I waited in a huge queue of people in NYC to buy 3 iPod minis (July 2004). I thought “these guys are onto something”.