Use Earnings Forecasts to Gauge Interest Upside vs. Downside

Allocating a Portfolio Based on Estimated Risk-Adjusted IRR

We’re looking for a total annual return of at least 25%, with position sizes adjusted for the degree of difficulty. For a given expected internal rate of return, the lower the outcome’s expected volatility, the higher the position size. We create an estimated risk-adjusted IRR for everything and then allocate the portfolio based on that.