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Technology Stocks : LSI Corporation

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To: Jock Hutchinson who wrote (9451)	2/4/1998 8:02:00 PM
From: DavidG	Read Replies (2) of 25814

Jock, a loss of fifty percent is mathematically twice as harmful as a gain of fifty percent is beneficial. You need a gain of one hundred percent to overcome a loss of fifty percent. I guess this is new math and my math goes back many more years than I want to admit. But, do I understand you to say that ...if I invest $100 in LSI and if I lost 50% or $50 it will be twice as harmful as a gain of 50% which is still $50...and... will be twice as harmful. Didn't I lose $50 either way. First way.... I started with $100 and ended with $50______1/3 2nd way Second way.. I started with $100 and ended with 150______3X First way ??Where is the TWICE as harmful? Maybe (2nd way)-(first way)=100... which is 2X(first way)..or.. $50? Did I cover all permutations? If you lose $50 you have to make $50 to break even...so if a stock goes from $100 to $50... it should be the same risk as going from $50 to $100...so your example of twice as harmful or 1/2 as harmful, I do not believe holds water. Not much different than flipping a coin...which sometimes works better in picking a stock...its still 50-50 on each flip<g> DavidG

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