Baron Rothschild & Bernard Baruch
#1
Posted 14 February 2007 - 01:58 PM
#2
Posted 14 February 2007 - 02:13 PM
#3
Posted 14 February 2007 - 03:15 PM
#4
Posted 14 February 2007 - 03:16 PM
#5
Posted 14 February 2007 - 03:27 PM
#6
Posted 14 February 2007 - 03:52 PM
#7
Posted 14 February 2007 - 04:05 PM
Thanks for bringing this to my attention. Hussman's usually worth reading, but it helps to be reminded.Baron Rothschild, who once said "I made my fortune by selling too early"
(a comment also made by Bernard Baruch).
Look at this math based on annual gain/loss percentages for consecutive years:
20%, 20%, 20%, 5% beats 30%, 30%, 30%, -20%.
15%, 15%, 15%, 5% beats 25%, 25%, 25%, -20%.
20%, 10%, 5%, 5% beats 30%, 20%, 15%, -20%.
5%, 5%, 5%, 5% ties 15%, 15%, 15%, -20%.
You can easily prove to yourself that even for a six-year market cycle,
you still generally win even if you call out Baron Rothschild after
year two. It just doesn't pay to risk the big loss.
Above is a snippet from Dr Hussman's weekly column.
#8
Posted 14 February 2007 - 07:41 PM
Baron Rothschild, who once said "I made my fortune by selling too early"
(a comment also made by Bernard Baruch).
Look at this math based on annual gain/loss percentages for consecutive years:
20%, 20%, 20%, 5% beats 30%, 30%, 30%, -20%.
15%, 15%, 15%, 5% beats 25%, 25%, 25%, -20%.
20%, 10%, 5%, 5% beats 30%, 20%, 15%, -20%.
5%, 5%, 5%, 5% ties 15%, 15%, 15%, -20%.
You can easily prove to yourself that even for a six-year market cycle,
you still generally win even if you call out Baron Rothschild after
year two. It just doesn't pay to risk the big loss.
Above is a snippet from Dr Hussman's weekly column.
The last line in this table is a good argument for keeping money in CD or
in the saving account
#9
Posted 14 February 2007 - 10:32 PM
#10
Posted 14 February 2007 - 10:53 PM
20%, 20%, 20%, 5% beats 30%, 30%, 30%, -20%.
20%+20%+20%+5% = 65% (4yr holding period)
30%+30%+30%-20% = 70% (4yr holding period)
How does the first holding period beat the latter? Especially considering if the profits were reinvested each year in interest bearing securities. Is this some kind of "let it roll" computation? As in all funds grow and remain in the account, therefore the final year hit produces the worst investment? My guess is the 20+20+20 fund manager will be unemployed or underinvested in at the end of year 3 and won't get the benefit of saying "I told you so."
U.F.O.
~Benjamin Franklin~