Batch Traceability is one of the more interesting topics in small-cap investing. If you are new to venture investment, and you want to know why it’s not as easy as it looks like, then you might be interested in this particular topic. The simple definition is that the valuation of your investment is also the valuation of each and every trade you perform. Now, this is the tricky part because it can be very difficult to separate the two.
The first way that most people think of is the price and how it relates to a certain stock or portfolio. This is where we look at the price per share, or the PPS, for a given day. What we are actually looking for is a stock or security’s historical volatility or its intrinsic value.
Now another way to look at batch traceability is to take a look at the total return on your invested money over time. We can calculate this by taking the annual earnings of the company and dividing it by the amount of money they spent on average to invest.