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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Honey_Bee who wrote (24623)	8/30/2006 12:21:14 AM
From: Math Junkie	Respond to of 42834

"Well, the first link doesn't work and the others, IMO, don't prove your premise--to me." OK, thanks for bringing the broken link to my attention. The rest of Suite 101 appears to be working, so apparently that page has been removed since I wrote that post. Here is the relevant portion, which should be well within fair use (I corrected some typos): ___________________ Effect of QQQ on P1: Assume 50% of 62.5% of portfolio cash reserves put into QQQ at $83 as recommended in the special bulletin. Also assume people bought at the open on the day the 3/11/03 bulletin hit the web. Total decline is ($83-$24)/$83x100%=71% 32.5% that was in cash was reduced by 71% to 9.4% or a loss of (32.5%-9.4%)=23.1% Also, money market interest on that 32.5% needs to be subtracted. Probably more than 1.9% but lets call it 25% even. Thus, P1 totals should be reduced by 25% to estimate the total loss of buying QQQ at $83 back in October 2000. ____________________ "But I hate anything that involves mathematics, so I'm guessing--that's why I wanted you to spell it out for me. :)" OK, I'll do my best. 8) The point of all this is to estimate what the result would have been if someone who was trying to follow Portfolio 1 had bought the maximum recommended amount of QQQ in October of 2000. The above estimate takes us from that date up to March of 2003, and says that in March 2003, our QQQ+P1 follower was down about 25% compared to someone who had just followed P1 as published. The next question is, what happened next? What happened next was that Brinker added enough RYOCX into his model portfolios, as a QQQ equivalent, that it then became possible for the QQQ+P1 follower to get back in step with the published P1 percentages by buying enough additional QQQ to reach Brinker's new allocation level. So from that point on, he/she would get the same performance as any other P1 follower, except their starting point was 25% lower. Consequently, we can calculate the perfomance of any period ending after March of 2003 by using Brinker's published Portfolio 1 balances and reducing the ending balance by 25%. That is how I calculated the QQQ-adjusted P1 performance for 12/31/1999 to 7/31/2006. I hope that fills in the missing steps for you.