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It looks like some of the tech stocks will have to go into negative
numbers to be buy candidates. Do you use extreme high and low points
relative to the CAGR curve for the series of curves or other more
intermediate points?
a
--- In amibroker@xxxxxxxxxxxxxxx, "Steve Almond" <steve2@xxxx> wrote:
> I came across a 'new' method of investing whilst perusing the Motley
Fool boards (I think a subscription is required - sorry). It's called
the BMW system after the inventor's name BuildMWell.
> http://boards.fool.com/Message.asp?mid=20414790
>
> Basically, he takes a long price history (typically 30 years of
monthly data) and constructs a series of % CAGR (compound annual
growth rate) curves which encompass the data.
>
> Here is an example (PEP) from, I believe, Excel:
>
>
> The first curve uses today's price and the price 30 years ago to
calculate the current CAGR (say 11.3%) which he then draws (manually)
on a chart printout.
> He simply calculates the price every 5 years assuming an annual
11.3% increase and connects the dots with a French curve!
> Similar curves are then drawn to hit the obvious high and low points.
>
> In this way he invests when the stock is historically 'low'. For
example see the above chart about mid 2002.
> As you will appreciate, this is not a short term system, but BMW
claims not to have had ANY losers since starting in 1999!
> The question, of course, is can we draw these curves in AB?
>
> Thanks,
>
> Steve
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