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Expectancy

  
  Education
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If you perform an internet search on how to calculate expectancy as it relates to trading systems, you will most often see the following:

Expectancy = (probability of win x average win) + (probability of loss x average loss)

The average win and average loss can be either percent gain or loss or it can be dollar values. For example, following are the performance statistics for one of my trading strategies:

  • Probability of win = 71.7%
  • Average win = 2.72%
  • Probability of loss = 28.3%
  • Average loss = -3.59%

I can calculate the expectancy in percentage terms as follows:
Expectancy = (0.717 x 0.0272) + (0.283 x -0.0359) = 0.93% (more…)

India:A Downhill Slide

  
Analysis, Education
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After recording a higher-than-average (i.e. >3.2%) growth rate in three of the last four years (FY11-14), rural economic growth stepped off the pedal in FY15 and rural consumption looks increasingly likely to remain subdued through FY16 with: a) government measures to curb inflation by lowering wages growth and crop MSPs (minimum support prices); and b) unseasonal heavy rainfall in early 2015 and forecasts of a consecutive year of weak monsoon further clouding the outlook.  
State of the Agricultural households: Agriculture sector GDP grew at a tepid 1.1% in FY15, as per initial government estimates. With monsoon rainfall coming in 12% below average in 2014 and unseasonal rainfall in early 2015 causing crop damage on up to 8-10mn hectares of cultivation (4-5% of total cropped area in India), rural consumption will likely remain weak in the medium term. Our analysis of NSSO survey data on the state of rural agriculture households over the past decade reveals little structural progress has been achieved – although income (12% CAGR) and fixed capital spending (15% CAGR) have increased impressively, structural issues persist because monsoon-dependent farming remains the principal source of income, improvement in institutional credit penetration has been weak and a lack of awareness of modern agricultural practices is pervasive. Legislative agenda progressing: 

(more…)

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