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*I store all data & statistics on my website www.EverythingEven.com
So it turns out that when you have a chart that looks something like this:
All you need to do is this:
And you will get right back where you left off:
But lets think about what had to happen here. Consider this; the VIJX dropped over 40% in that flash crash which thus requires more than a 66% gain just to recover. We call this chop-loss and many non-math orientated people get confused with this but an easy way to remember is to think of losing 50% on a $1 stock. You now have 50 cents and in order to get back to your original amount of one dollar you would need a double!
This simple consequence is often neglected as it doesn't come naturally to most of us. Its also why those 2x or 3x leveraged ETF's are absolutely atrocious gambles as evidence here:
Full twitter feed explanation HERE by the Dirty Texas Hedge. The guy is awesome.
Sponsor Side Note: RJK Exploration announced April 1st, they found 18 diamonds in a 50lb sample from their Paradis Pond target and now await a 600lb sample from their Kon Property. See news here
Before we start:
Question: Do you think all companies on average recovered or do you think only a small number of companies recovered but did well enough to compensate for the others and made the VIJX and other aggregate charts look good?
The pie chart from March 31st corresponds well to the abysmal chart first presented above.
Interestingly, two months later, it appears many of us are taking part of this rally. We even have some bright green for once! Nice recovery!
We have 3 people over 200%, and 26 people over 100%.
On April 1st, we had only 1 person in the StockPickingContest who had all 3 positive picks (SPC Hat Tricks Contest).
Today, we have 116 people. <- Nice recovery indeed!
The most picked companies graph is always my favorite to show, in fact I created the EvenPrime Most Picked Companies Short ETF that reflects the fact that the most picked companies have always underperformed. At the end of March I was up 40%.
Interesting to note this drop corresponds well to the VIJX drop at just over 40%. And the recovery is the same. I will admit, I was shocked! These stocks had to rally more than 66% to recover these losses!
A couple things I found interesting while compiling the data is looking at the top 10 contestants at the end of March and comparing them to their position today.
Consistency is important! I believe this is the first time that the top 10 are still all within the top 25 two months later.
And if you've heard the rumour that I have been planning a summer stock contest, I admit, it is true, but I am still working out how and when to do it.
A 3-month long Summer Contest would be awesome and Im still working out details with my sponsors as they have mentioned their interest to possibly provide some prizes. We are considering something like the top 50 winners could win a 1 ounce silver coin. The only requirement would be the contestant would have joined the company mailing list which I will set up for each person to have access to once the contest is tallied up and running.
This is all still very early on so stay tuned, I should have a game plan in a week or two.
Best of luck to everyone in the contest and more importantly, I wish everyone health and prosperity especially during these tough times.
With gratitude;
- EvenPrime
Disclosure: The author of this article owns shares in Fireweed Zinc, Osprey Gold, and RJK Exploration and may choose to buy or sell at any time without notice. Scottsdale Mint, RJK Exploration, Osprey Gold, and Fireweed Zinc are currently site sponsors.
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