AI
Hi Ken, I looked at your HCRT table and noticed you still use simple addition. For example: the row for the two weeks ending April 1 and April 8 reads
127% - 22% - -33% - -21% - Total 95%
Now let's see what happens when you invest $1000 in just those weeks over those years:
2000: 1000 - (21% of 1000 =) 210 = 790
2001: 790 - (33% of 790 =) 261 = 529
2002: 529 + (22% of 529 =) 117 = 646
2003: 646 + (127% of 646 =) 820 = 1466
from 1000 to 1466 is ~47%, about half of your total. Your way of calculation underestimates the power of negative returns in a mixed run. I don't think you want to do that...
And in an all positive run, your total comes out too low, in an all negative run, it comes out worse. It is perfectly possible to lose 50% in each of 3 consecutive periods: it brings you down to 12.5%, not to owing 50% to the bank. And when you gain 50% in each of 3 consecutive periods, you stand at 3375 (starting with 1000): a 237.5% gain, not 150%.
In short: you are messing up. Repeat to yourself every morning when you rise: I will never add up percentage gains and losses.
If you want an explanation of how you should go about it, don't hesitate to ask.
Regards,
Karel
127% - 22% - -33% - -21% - Total 95%
Now let's see what happens when you invest $1000 in just those weeks over those years:
2000: 1000 - (21% of 1000 =) 210 = 790
2001: 790 - (33% of 790 =) 261 = 529
2002: 529 + (22% of 529 =) 117 = 646
2003: 646 + (127% of 646 =) 820 = 1466
from 1000 to 1466 is ~47%, about half of your total. Your way of calculation underestimates the power of negative returns in a mixed run. I don't think you want to do that...
And in an all positive run, your total comes out too low, in an all negative run, it comes out worse. It is perfectly possible to lose 50% in each of 3 consecutive periods: it brings you down to 12.5%, not to owing 50% to the bank. And when you gain 50% in each of 3 consecutive periods, you stand at 3375 (starting with 1000): a 237.5% gain, not 150%.
In short: you are messing up. Repeat to yourself every morning when you rise: I will never add up percentage gains and losses.
If you want an explanation of how you should go about it, don't hesitate to ask.
Regards,
Karel
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