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Tackle Today: Welcome to Extremistan V 🍌

August 2, 2018

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Slipping on a banana peel.

Those of us who have lived through market corrections, know that the statement “Markets take the stairs up and the elevator down.” is 101% true. Even if you are a newbie in the realms of trading, just go back some ten years on the S&P chart to see how bad corrections are compared to rallies. From this perspective, taking the elevator would be too classy; most probably it’s a jump out of the window.

In this sequel of the Extremistan, we’ll be simulating the S&P returns using those same 4,529 working days—to avoid skewed results—, however, instead of erasing gains we’ll be erasing the DOWN DAYS.

What a blessing. We’ll be ERASING from History, the top 10 largest daily point LOSSES, leaving just the fun. Before revealing the results, let’s recapitulate some previous Extremistan numbers:

_ S&P total return in 18 years: 96.88%

_ S&P total return without the 10 largest daily point gains: 7.85% (–12.34)

_ S&P total return without the 10 largest daily percentage gains: 3.17% (–30.56)

If removing the top 10 up days from 18 years of data would’ve brought us misery, conversely, without the top 10 DOWN days, we would’ve been rich, right? 1,200% return? 3,000% return?

Yippee Ki Yay.

262.72% is all you would’ve got. It’s not that bad, 14.60% per year on average, +2.71 times more return. However, because we’re on the Extremistan World we were expecting, at least, to be Gods of Thunder.

Instead, we’ve slipped on a banana peel.

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S&P 500 Returns

From May 10th, 2000 to May 10th, 2018.

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I would change it to “Held every Thursday, this show helps you perfect your favorite cashflow strategies..


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