Hi Gang, Math can be so odd. From a base of 100 the DOW/stock market went up about 332% before the crash of '29 ending, roughly, in the middle of '33 at about 36. So an up of 332% is less than an 89% decline. In fact the low point is roughly 64% down from the baseline calculated the way I do. Calculated the way the online calculator does it it take a move up of about 278% to equal a baseline of 100
This one of the reasons I calculate a percentage down from the starting point rather than from an end point that is up 120% of the endpoint - (20% up) - to get to the baseline.
100 -20% = 80 the way I calculate it rather than 84 * 120% = 100 that the online calculator TooFuzzy created says.
After all 20% up from 100 equals 120, or 20 points, so why shouldn't 20% down equal 80, down the same 20 points as the amount up?
I think the way it calculates the down point is too soon. Granted, 20% down calculated this way is a significant correction, but then so is 20% up and ETFs only rarely move this much. This is why tighter buy/sell safe is needed, like Tom uses, 0% up and 10% down which makes sense when combined with a minimum shares to sell of 5%. This get you a buy at 87% of the current price and a sell at 105% of the current price, a total range about 18%, much more reasonable than a range of 40%, or 36%, of current price.
It also delays a buy more than a sell so we capture profits sooner and catch a lower dip.
Best,
Allen
