Past performance is not a guarantee for future performance
but a good indicator
I wanted to do something different tonight. I made a nice Win32 console application. The code takes the historical data for a blue chip stock, and tries to predict it’s price based on past performance. The application simulates trading based on these predictions (buying and selling).
Here is the outcome:
Initial portfolio: 25 USD - the price of 1 share (1 share in the portfolio)
Final portfolio: 166 shares + cash, with a total value of 68.91 USD
The timeframe is 10 years. That’s 275.64% of the initially invested amount
The stock is a pretty volatile one, and the 10 years include several price corrections, etc.
When I get some time, I am going to try this with different share values.
The math behind all this is pretty simple, and it’s based on some abstract theories
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