U.F.O.
I think Hussman assumes compounding.
For example: 20%, 20%, 20%, 5% beats 30%, 30%, 30%, -20%.
would look like this in compounded numbers:
Start with $100-->120-->144-->172.8-->$181.44 beats
$100-->130-->169-->219.7-->$175.76
Baron Rothschild & Bernard Baruch
Started by
pdx5
, Feb 14 2007 01:58 PM
12 replies to this topic
#11
pdx5
-
- Traders-Talk User
- 9,527 posts
I want return OF my money more than return ON my money
Posted 14 February 2007 - 11:33 PM
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule
#12
novice
-
- Traders-Talk User
- 54 posts
Member
Posted 15 February 2007 - 01:07 AM
Your hero Dr. Hussman made -0.45% since the 12-31-06. The main goal of his calculations is"The last line in this table is a good argument for keeping money in CD or
in the saving account."
Purchasing SPX at the close 12-29-06, makes you 2.6% on your money as of today's close.
to prove that hemade you money when he lost them.
#13
TradeMark
-
- Traders-Talk User
- 809 posts
Member
Posted 15 February 2007 - 02:03 AM
Seems to me the main moral of the story is: "don't lose 20%". Or, as pretty good investor from Ohaha says, "the first rule in making money is not to lose money."
Stops a good idea. Every time I have lost big bucks (except for overnite news related gap downs), it comes from losing money (aka not respeccting stops).
None the less, the point illustrated is a good one.
Thanks
TM
