Ep. 1049: Wide Thinking with Michael Covel on Trend Following Radio
Michael Covel's Trend Following
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How Much Money Do You Think You'd Have After Three Years?
Let's say you started with a hundred dollars. How much money do you think you'd have after three years? Youv soy made 30 %, and then you've lost 30%. You're going to be worse off. The important point here is that arithmetic returns really don't matter to most people. An extreme case might be that you gave all your money to burney madoff,. But the more volatile an investment is, the more big swings there'll be between an arithmetic return and a geometric return.
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