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Technology Stocks : Cymer (CYMI)

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To: michael modeme who wrote (17246)5/1/1998 2:11:00 PM
From: Stephen Swantz  Read Replies (1) of 25960
 
Michael. re: -> $100 is a 233% increase (almost 1/2 the return from buying at $20!)

Your method of calculating the increase is quite dramatic. However, if viewed from another angle, the gains are less dramatic and more weight can be given to a more cautious investment approach.
$20.00 would grow to $100.00 based upon monthly compounding of interest (growth) rate of 54.865% over a 36 month period of time.
If you bought in at $25.00, the growth rate would be 47.11% and the $30.00 purchase price needs a 40.81% growth to reach $100.00 in the 36 months. So you have three different growth rates.
If the 54.865% = 100, then the 47.11% rate is 85.86 and the 40.81% rate = 74.3826.
In effect, 15% less at $25.00 purchase or 25% less return at the $30. purchase price.
In a nutshell, I believe one should look carefully at the tide to see if it is coming in or going out before jumping into the surf. A 40% return is not bad when you are more comfortable about the direction of the stock.
Remember, all you have to lose is your money.
Steve
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