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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Mike McFarland who wrote (647)	5/15/1998 1:07:00 AM
From: Moominoid	Respond to of 2578

Can you tell us a bit more about this Sharpe index--can you back test your trades to check for skill? This would be a terrific thing to know (if one has skill, or has only met with some luck). I wonder if believing if you have skill changes your level of skill. The Sharpe (Nobel Laureate in Economics) index is one of the many indicators used to test which mutual fund managers get high returns by taking high risks and which ones actually have more skill. Its notion of risk is the variability of returns and so skill is getting a high mean with low variability. This is a limited notion but better than nothing. I have applied it to my monthly returns since October 1996. I calculate an accumulation index just like a mutual fund that reinvested income would and can then apply these indicators. As long as you have all the crude data you can do the same. This one is simple to do on a spreadsheet. Currently I'm beating the one of the best mutual fund managers in Australia but I am not as constrained as they are by their prospectuses. I haven't done the same calculations for all the relevant mutual funds here - ie the top few. David