My expertise is in advertising – certainly not trading. In that area we, very much like traders, live in a sea of numbers e.g., ratings, cpms (cost per thousands), shares, HUTs, PUTs…all that stuff that is so boring and so uncomplicated.
What we are pitched by the networks and cable nets etc., is percentage growths so we look at that very closely. For instance, ION Network showed perhaps a 15% growth year on year in the lower end of the adult 25-54 market. They pointed out that the major networks either stayed the same or dropped, particularly in the lower end, and at as much as 6%. So ION up 15% NBC down 5%...so it makes sense to buy into ION to catch the younger crowd. Right? Wrong.
Percentages, often quoted on the financial networks is horribly misleading and this little thread is to warn you to think about it before it influences.
The market hit 10,000 yesterday. The 5 year high is 14,000 and some and the 5 year low was about 6,600. (I just heard a pundit talk about the S&P up 50% or something this year so case in point).
The DOW is down about 29% from its high and up 50% from its low. It is the “up from it’s low” that makes the difference and is always the suspect number. It is easy to demonstrate. You have $100 and take a 10% loss. Now you are at $90. If you make a 10% gain you aren’t even, you are at $99 and have lost $1.
Percentage shifts that go up at the same rate they go down always give you less money or less of anything. Always. It is simple math. The guy who bought in at 14,000 and saw it go to 6,600 saw a 53% loss. Now the DOW is up 50% from the low and he is still 4,000 in the hole. See what I mean.
What we are pitched by the networks and cable nets etc., is percentage growths so we look at that very closely. For instance, ION Network showed perhaps a 15% growth year on year in the lower end of the adult 25-54 market. They pointed out that the major networks either stayed the same or dropped, particularly in the lower end, and at as much as 6%. So ION up 15% NBC down 5%...so it makes sense to buy into ION to catch the younger crowd. Right? Wrong.
Percentages, often quoted on the financial networks is horribly misleading and this little thread is to warn you to think about it before it influences.
The market hit 10,000 yesterday. The 5 year high is 14,000 and some and the 5 year low was about 6,600. (I just heard a pundit talk about the S&P up 50% or something this year so case in point).
The DOW is down about 29% from its high and up 50% from its low. It is the “up from it’s low” that makes the difference and is always the suspect number. It is easy to demonstrate. You have $100 and take a 10% loss. Now you are at $90. If you make a 10% gain you aren’t even, you are at $99 and have lost $1.
Percentage shifts that go up at the same rate they go down always give you less money or less of anything. Always. It is simple math. The guy who bought in at 14,000 and saw it go to 6,600 saw a 53% loss. Now the DOW is up 50% from the low and he is still 4,000 in the hole. See what I mean.