Lars,
PMFJI,
First, let me say to John, thanks for a new thread. Hopefully, there will be enough sentiment surveys to report to keep it going.
But, back to your dilemma. I think the confusion comes in your different starting periods. You are starting from the beginning of 1987, with the year up by 4.7%.
John (in his post 1714 on the Semi-Equip. Blood thread) is going from summer of 1987 thru 1996. (Okay, actually he said summer of 1997, not 1987, but I think I got the gist of it <g>). And from the 1987 summer DOW of 2700 to the end of the year around 1700 to 1800, is a 33 to 37% drop.
If you reduce your FV of 4.06 by 40% (the 4.7up plus the 35% down),
and do the compounding over the 10 years, it becomes 9.3%. And over 9.5 years (since the first half of 1987 should be excluded from the compounding) becomes 9.8%.
So you both are right!! But, for the purposes of what John is pointing out, since the sentiment happened in summer of 87, that where the calculations should start, IMO.
Mat |
