Author: tpoto

Subject: Re: Getting away from the bear

Date: 9/27/2008

Recommendations: 26

Jim- Thanks for the methodology- here`s another one, that fairly simple. 1) Take the 40 week moving average (200 day) of the S&P 500 2) If this week`s figure is better than that of 2 weeks ago, then buy (or hold, if in already). 3) If less, sell or wait it out. Back to 1997, you would have done about 50.6% better than buy and hold. About 7 switches over that time period. Now, if you are into the ETFs that do the double &/or inverse, here is a table of the theoretical gains. For example, if rule 2 applies and you buy the S&P ETF, and when rule 3 applies, you buy the double inverse; you`ll end up with 133.5% better than S&P buy and hold. % Better (worse) than B&H SPY (1X) SSO (2X) 50.6% 181.1% SH (-1X) -10.1% 99.7% 272.7% SDS (-2X) 5.2% 133.5% 335.7% Note: none of the figures incluce any interest obtained if out of the market nor transaction costs. See the following for doubles and inverses of the S&P500 ETF- SPY,SSO,SH,SDS http://seekingalpha.com/article/36908-leverage-and-inversion...