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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Simba who wrote (96816)	7/21/2002 7:09:45 PM
From: Simba	Read Replies (2) \| Respond to of 132070

BGR: I created the dca.htm chart using excel. This chart confirms my calculations. cross-currents.net Simba

To: Simba who wrote (96816)	7/21/2002 8:38:29 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 132070

simba, bgr is playing fast and loose with the numbers. he probably works for the govt. -lol- he's screwing something up. probably not including his 10% put buys with his 401k contributions... however, finding out what is wrong is NOT in his best interest b/c getting you butt kicked by passbook savings billy over a 10 year boom period ain't something to be proud of. come on! how much time would you spend figuring out passbook savings kicked your butt over a decade!!! ;-) the puts do not explain the difference between 1-2% annual returns and 13% annual returns - not by a long shot. also, didn't bgr start dollar cost avging in early 2000? that makes this 2.5 years into his program and he now says he's less than halfway through his 4 years program. hmmmm... numbers issues apparently run deep... ;-)

To: Simba who wrote (96816)	7/21/2002 8:42:41 PM
From: Skeeter Bug	Respond to of 132070

That chart says your invested capital would be up less than 15% in total not including your PUTS hedging and not counting your employer investment as SP500 return this annualizes to less than 2% per year. passbook savings billy beat the heck out of this electrified s&p dcaer... -lol- and remember, he has a big chunk of money in the naz that is all down - further reducing his whopping 1-2% annual gains in the s&p. of course, bgr will kick and scream, click his heals and continue to repeat 13%... all the while not realizing he ain't in kansas anymore... -lol-

To: Simba who wrote (96816)	7/21/2002 9:47:30 PM
From: BGR	Read Replies (1) \| Respond to of 132070

Simba, I am still convinced that by the time I retire, technology will be a much larger component of the economy that it is today. Don't forget that GE, once, was the technology company of its age - light bulbs and all. Given that, I choose to be over allocated in technology, hence my choice of indices. This, incidentally, is what I had clearly mentioned in my post in 2000, when I started to switch my allocation. It seem that you read that post, reshaped it in your own mind to suit your prejudice, and forgot my underlying argument. Well, thank you. As for the puts hedging, that was part of the plan, hence it makes total sense to ignore it. When you get money from your car insurance on the event of an accident, do you not include it in your account balance at that point in time? -BGR.

To: Simba who wrote (96816)	7/23/2002 12:37:49 PM
From: TimF	Read Replies (1) \| Respond to of 132070

SP500 is up about 80% from Jan 1994 until now (not including dividend), i.e if you invested $1 in 1994 it will be $1.80 now. That is about 8.5 years from 1994. You claim a compound annual 13% for 8.5 years. At that rate your total return comes close to 180%, i.e. if you invested $1 in 1994 it should be $2.8 now. Constant weekly DCA would produce a lower gross return then if you had invested all of the money in 1994, but it might produce a higher annualized return. Does your analysis account for these two facts. 1 - The average share cost less then the average price during the period your are using DCA because you buy more shares when the price is lower and less when it is higher. 2 - Since most of the money has not been invested for 8.5 years you can't use as the period you use to calculate investment returns. If I invested $1000 exactly 2 years ago and $1000 exactly one year ago, and my current balance was $3000 it would seem your method would say that my return is $50 gross over two years, or 25% a year. Actually the rate of return would be better then that. Half of the money would be invested for two years, half for one year. The average term would be 1.5 years not two years. Tim