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To: DavidG who wrote (9475)2/4/1998 11:33:00 PM
From: Jock Hutchinson  Respond to of 25814
 
But that's precisely the point--Risks are based on percentages. If you have had a fifty percent loss, than your chances of recovering your money are less than the chance of a loss. That's why traders always look at a proposition as requiring a reward risk ratio above fifty-fifty, and more like two or three to one. Moreover, when you factor in the certainty of such issues as a long term bond, your risks increase even more so, which is why the rate of return on stocks must be ten percent annualized. This also highlights the reason why it is so difficult to grow your portfolio at a rate above thirty percent a year, because one bad year will often require two years to get even. But what they hey. Avoid all risks and join my risk free contest as referred to at #9468



To: DavidG who wrote (9475)2/5/1998 10:58:00 AM
From: Bald Eagle  Read Replies (2) | Respond to of 25814
 
<< If I loose fifty percent on a one hundred dollar stock and then gain fifty percent back I will be at seventy-five dollars, and if I then loose at fifty percent of that and gain fifty percent back, I will basically be at fifty dollars.>>
NOT!, let's do the math.
50% of 100 = 50
150% of 50 = 75
50% of 75 = 37.5
150% of 37.5 = 56.25
56.25 is 12.5% higher than 50.
Anyway, what does this have to with LSI?