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After thinking about it

Posted by: DTravel on Jan 09, 13:27 in response to JDolphin's post Wow - you sound just like me (at least in my head) :) -...

I think my way of calculating it is correct. The (estimated price / curr price ) ^ (1/days) - 1 (* 100) formula is based on a compounding interest investment, such as a bank account. None of the HSX securities pay interest, the increase in a portfilio's value is not from interest payments that add to the principal thereby increasing the amount of interest income. The increase is from what you could sell the commidity for. The price change does not accelerate as the price changes. I also think it doesn't accurately deal with shorting a security.

Examples (simple and a bit extreme to make them easier to follow):

Current Price $10 $100 $10

Estimated Price $100 $10 $100

# days 10 10 5

APD 25.89% 20.57% 58.49%

My calc 90% 9% 180%

By my calculation, spending $10 to make $90 in ten days is a lot better than spending $100 to make $90 in ten days but the APD formula shows a lot less difference. Also note what happens when you change the period from 10 days to 5. My calc shows the investment growing twice as fast (180% v. 90%) while the APD formula shows it growing more than twice as fast (58.5% v. 25.9%).

ZSALD is a very good short at the moment. Aaron123 Jan 06, 17:06

dROI is about 0.75% per day {nm} DTravel Jan 06, 17:23

I calculate it as 1.28% - but if you'd bought it in Sept at last adjust it is 1.78%, - $100 drop - I was taking a chance one would report {nm} JDolphin Jan 06, 22:56

Math inside DTravel Jan 06, 23:58

Hmmm ... that's an interesting way to do it. I used the DROI formula posted on this forum (inside) JDolphin Jan 07, 01:59

Don't read too much into DROI. It's only an average. For arguments sake, lets say a $120 stock is a sure thing to drop $50 in 50 days... osmosis2003 Jan 07, 02:22

You've got me wondering too. DTravel Jan 07, 14:35

Wow - you sound just like me (at least in my head) :) - goes off to play with my spreadsheet :) {nm} JDolphin Jan 07, 17:53

After thinking about it DTravel Jan 09, 13:27

Neither have been release or reported box office so far from guarantee {nm} Antibody Jan 07, 10:18

But unless you're a HPOT or TWIL actor, the chances of 2 - $250 movies back to back are very slim so I'll go with the downside {nm} JDolphin Jan 07, 13:25

That has nothing to do with whether a indie distributor will report to ERC or not. {nm} Antibody Jan 07, 15:01