Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (74594)	11/13/2007 10:13:04 PM
From: Sr K	Read Replies (1) \| Respond to of 77400

"Rosy forecast for S&P500" but faulty analysis. 1. I don't see that he's from Morningstar; he may be "advertising" his analysis on their site and paying for it. 2. A 9% discount recouped over 3 years would be 3.19% per year. This is (1.000/.91)^(1/3) 3. Subtract .09% expenses from 10.2% and you get 10.11%. 4. He assumes $0 cost to buy the SPY and a $0 bid/asked spread. 5. Compound 3.19% and 10.11% and you get 13.63%, not quite the 13.7% claimed. 6. His conclusion "Put differently, investors can buy a security that's less than half as volatile as our typical below-average-risk stock at 91 cents on the dollar. We'd take that trade" is deceptive because any portfolio (even with 5 or 10 stocks) has lower (expected, statistical) volatility than a single stock.