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In this case the market sooner or later will reflect this and the average investor will lose money.

Pekelo, certainly the stock market is not a closed system but there is an upper bound. This bound is the GDP growth. If the stock market functions efficiently then this is the most that the average investor can extract as return. The available data support this. You just have to check the...

If I may make a suggestion, until you have more experience on the behavior of in the money, at the money and out of the money options, it may be beneficial to study their behavior using a spreadsheet and analyzing how different scenarios will affect the option price. For example this...

All these threads for a stock that made only 300% ?? :D

Perseus about insults in posts just ignore them… I will quote you what a philosopher once said (the translation is probably bad). ¡Master they are swear at you in the marketplace¢ ¡Let them do. In my absence I give them permission to beat me also.” :)

No, I didn't. Buffett mentions 4% real growth including dividend yields. This is equal approximately with the real US GDP growth.

Yes, I agree let¢s close it :). About the real returns in the stock market. Quote by Warren Buffett. Interview in Fortune magazine November 22 1999. So according to Buffett the GDP growth is a ceiling factor to stock market gains. Now let¢s see what the evidence show us...

Yes but you have to adjust for inflation also. 1$ in 1900 is not worth 1$ today. Also you still has the hindsight bias.

Spike if I am not mistaken, the s&p500 was introduced in 1957 and the older quote I have is December 31, 1956, at 46.67. But even assuming that we can read quotes from a log chart then 16 * 1,18^56 makes as 169633 so the value of 18% annually is wrong. Still you don¢t take into account...

Ok DJIA 1/1/1900 at 68 DJIA 2006 at 11200 That is a growth of less than 5% annually and this with the hindsight of been invested in the fastest growing economy of the western world. Try doing the math including the markets that a conservative investor would own back in the 1900. That...

:) Here we go again... I will quote my reply in a different topic.

DJI at 2 january 1926 was at 158, today is at 11120 This is 5.5% annually. Taking into account dividends will give more than this but then also you have to take into account the inflation adjustment. And these returns are with hindsight of the US stock market outperformance. Try to...

I think the ET community had many times in the past this discussion. My view is this: If you take the whole market as one entity and you add some time lag, the stock market game is very close to a zero sum game. First of all the stock market as a whole grows no more than 4 – 5% a year on...

You did the right thing.

Use something like this in the vba editor... Sub VR_Profile() Dim a(1000) 'close data Dim v(30) 'vr profile data For i = 1 To 1000 a(i) = Cells(i + 1, 1) Next i For j = 1 To 30 ct = 0 For i = j To 999 Step j v(j) = v(j) +...

1.67 is the ratio when the stock returns follow the normal distribution. No one claims that an arbitrary stock will have this ratio. It use it as an indicator for examining if a stock/market/etc is mean reverting or have more trends than expected. I have some papers that discuss the...

It¢s a note made by Taleb in his Dynamic Hedging book. He explains that the math to arrive at the Parkinson number and the equation Parkinson Number = 1.67 * HV only applies in a 24 hour market. In an equities trading market Parkinson Number = 1.67 * (altered HV) were for the...

The Parkinson formula is N is the number of time periods you use for the calculation (for example number of days) H is the high of the i-th period L is the low of the i-th period For annualizing the number you also have to multiply it by the square root of number of trading days per...

Of course one can use common technical analysis indicators to define trendiness. Depending on what he wants he can use different tools for different tasks. To give you an example Taleb was interested in trends for trading Barrier Options. So what was most important to him was the distribution...

If you are not interested in options I wouldn't recommend buying the book. Out of curriocity I made a quick calculation using the Parkinson number in a sample of DJI data and also in a sample of a strong uptrending index. DJI gave an almost random data series with a ratio 1.73 (1.67 =...