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Strategies & Market Trends : Contrarian Investing

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To: pcyhuang who wrote (1527)	8/24/2007 8:32:55 PM
From: semi_infinite	Read Replies (1) of 4080

It's not my job to correct bad math or bad assumptions. However, if we were to take the approach seriously, then here is what the approach would give for 10% deliquency and 0% devaluation or flip it around. Both cases using the approach results in ZERO allowance for losses. And then implicit in the approach is superposition of probabilities, that maybe ok but who knows? I get a number much higher then that by more than an order of magnitude but I am not sure it's right either but it's a lot closer to how the market has acted with respect to stock price.

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