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No, chip, just expressing an opinion, we all have one. I put more weight on
the time in trade. if I get 25% of the move in anything less than 1/4 the
time, I call that a good system.
As for B&H beating your system per the 50% example. Your system may have
kept you out of the decline but chewed up your money in a basing activity
because one might be applying a trend following system to a mainly ranging
stock.
I am sure you take that hard look, so many don't, they stop at the bottom
line % profit figure without a review of the many things that makes up a
good system. It comes easy to use - did it beat buy and hold?.
Richard Estes
-----Original Message-----
From: Chip Anderson <chipamy@xxxxxxxxx>
To: Richard Estes <restes@xxxxxxxxx>; chipa@xxxxxxxxxxxxxxx
<chipa@xxxxxxxxxxxxxxx>; Alberto Torchio <atorchio@xxxxxxxxx>;
metastock-list <metastock-list@xxxxxxxxxxxxx>
Date: Friday, February 06, 1998 2:25 PM
Subject: Re: Buy and Hold
>Geez Richard, I was not advocating slavish devotion to B&H and the
>suspension of common sense. Sorry if my quick comment touched a
>nerve, but I find it useful and prudent to understand how well or
>poorly a new system that I'm considering compares with a B&H strategy
>over different time periods. If the system I'm evaluating can only
>generate 1/4 of the B&H profit in a given market, then I'm sure not
>gonna use it in that market.
>
>In retrospect, I should have said "beats B&H by a significant
>percentage."
>
>> Drawdowns are ignored when you look at bottom line. B/H might be
>ahead now
>> but you could have set through a 50% drop.
>
>If that's true and B&H still beats my new system, then my system
>probably needs to be adjusted because it missed the 50% drop. Again,
>this suggestion was for comparison and evaluation purposes. After
>running the comparisons, I take a long hard look at where the buy and
>sell arrows fall and why and I then apply common sense to the results.
>
>> One aspect Equis might change is not start count till there is a
>system buy.
>> Another more realistic change would be to stop compound trade
>amounts and
>> let us say buy/sell 1000 or 100 shares on each trade, instead of
>putting all
>> profits back in each trade.
>
>I completely agree with this suggestion.
>
>Just trying to help,
>Chip
>
>_________________________________________________________
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>Get your free @yahoo.com address at http://mail.yahoo.com
>
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