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To: Chuzzlewit who wrote (125)	2/8/1999 9:02:00 AM
From: Reginald Middleton	Respond to of 419

The quickest way to inside my thought process is to read what I have wrote on the topic. The standard deviation of analyst's forecasts will not work because analyst's forecast are driven by factors other than the pure outlook of the companies' performance, see rcmfinancial.com. The implied volatility of LEAPS idea is a good source of forward looling information, but it does not translate directly into the investors's percepetion of risk for in the text book measure of risk, reward is included in the risk calculation. Think of the squiggly line going up and down on a volatility graph. Imagine if you could just quantify the probability of the down lines and call that risk. The probability that you will lose x% in the worst case scenario with a 90% confidence envelope. This is the basic premise of value at risk. For more on this, see rcmfinancial.com. Pay close attention to the risk assessment questionnaire used in the asset allocation process. There is a comparison to the questionnaires of several big fund families as well as a survey to see how others selected. This is very much in draft form and I am still working on it, but I guess I'll live if I post early.