From: Jeffrey Epstein <jeevacation@gmail.com>
To: "Dr. Henry Jarecki"
Subject: Re: FW: Annualization Chart
Date: Wed, 14 Jul 2010 07:46:48 +0000
in fact , you might want compound the loss at the same compounding rate as the gain. if i am up 20% , your
calculations assume the same 20% rate of return , for the next six months„ ( annualized at the current rate )..ie A
return on the initial amount , PLUS a return on the increased gain. For losses. you should only use initial
amount . as opposed to suggesting you can't lose more money on the amount already lost . Unless you are
comfortable with the fact that since stocks can;t trade below zero. If the line of the chart, clearly points to zero..
I at least always want to know how long till broke. with losses annualized, it never gets there until its too late.
On Tue, Jul 13, 2010 at 10:51 PM, Jeffrey Epstein leevacation®gmail.com> wrote:
no no no „ annualize the the return on chart one.show it for each month, from month six to 12.. ,. the question
i raised was that the annualized returns are extremely misleading. . when it comes to losses.. if the stock went
from 100 to zero in a linear fashion. , Though one would lose 100"% of their money if the decline of 1 pt a
day continued until the end of the year, with full knowledge ., the annualized return 6 months out -75
%would lead you to believe that you would still have 25 dollars left .
On The, Jul 13, 2010 at 10:11 PM, Dr. Henry Jarecki wrote:
From: Alessandro Motto
Sent: Tuesday, July 13, 10 17:07
To: Dr. Henry Jarecki
Subject: Annualization Chart
Please disregard the previous version. I have corrected a typo. Regards,
Alessandro
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