It's a cli tool build in rust, that helps calculate intrinsic value of an investment. The cli is inspired by the Mohnish Pabrai book "Dhandho Investor" which I still feel it's one of the best starting investing book.
bash
cargo install dhandho
```bash dhandho help
dhandho 0.2.0 Alexandru Olaru. alxolr@gmail.com
USAGE:
dhandho
FLAGS: -h, --help Prints help information -V, --version Prints version information
SUBCOMMANDS: cagr Calculated the compounded anual growth rate help Prints this message or the help of the given subcommand(s) intrinsic Computes the intrinsic value of an asset by providing different parameters kelly Maximaze the gains by providing different assumptions. Ex: -a 0.8,21.0 ```
CAGR Compounded anual growth rate.
You bought a Pokemn Trading card in 2012 at a price of 100\$. In 2022 your card is listed on ebay at a price of 350$. Calculate the compounded anual growth rate.
Let's find out our input variables for this problem. We have the final value = 350.0\$ initial value = 100.0\$ investment period = 10 years (2022 - 2012);
```bash dhandho cagr 350 100 10
0.1334616 # 13.34% ```
The anual compounded growth rate for the investment is 13.34%.
Intrinsic value is the value of an asset based on the cash flows it generates.
We have a company which has a market cap of 1000\$. The company has a cashflow growth rate of 10%. We will use a discount rate of 10% and a terminal multiple of 10x.
```bash dhandho intrinsic -c 100 -g 10,0.10 -r 0.10 -m 10
0 | 0 | 100
1 | 110 | 100
2 | 121 | 100
3 | 133.1 | 100
4 | 146.41 | 99.99999
5 | 161.05101 | 100
6 | 177.15611 | 100
7 | 194.87173 | 100
8 | 214.35892 | 99.99999
9 | 235.79482 | 99.99999
10 | 259.3743 | 99.99999
NPV | 2000
```
As we can see for the given requirements we have an intrinsic value of 2000\$. The company is undervalued.
Kelly criterion is a formula that helps you maximize your gains by providing different assumptions.
Let's say you have a 55% chance of winning 2x your investment and a 45% chance of losing 1x your investment. The formula will help you calculate the optimal bet size.
```bash dhandho kelly -a 0.55,2.0 -a 0.45,-1.0 -b 25000
Bankroll: 25000 Kelly: 0.32500002 Amount to wagger: 8125.0005 ```
The optimal bet size is 32.5% of your investment. If you have a bankroll of 25000\$, you should bet 8125\$.