A.I.M. Users Bulletin Board

[Firebird400]

The quirks of math work against you


Let's see,, a $100,000 investment goes up 10% this year to $110,000,,, only to fall back 10% the next year to a value of $99,000,,,,mmmmmmmmmm, up 10%, down 10%, yet we've lost $1000 bucks,,, that's why we need things like AIM, and AIM re-balance, etc. In the book when the price falls from $10 to $4, that's a 60% haircut,, yet a 60% gain on $4 only gets you to $6.40,,, the example in the book is just not realistic for most market vehicles, that's why I've talked about RYTNX, it has extreme price moves and comes as close as anything I can find. The highest adjusted close in my example was about $84 per share,,,,, now is RYTNX going to make it back to $84? Highly unlikely since its at $28 after a nice run up this year. If there's something I could change about my PCA program, or Newport, it would be to make the 50% add on to Portfolio Control for every buy adjustable,, I'd love to play with that for awhile, Firebird