A stock (or a fund) has an average return of 0%. It moves on average 1% a day in... | Hacker News

Hacker Newsnew | past | comments | ask | show | jobs | submit

		CamperBob2 on Jan 15, 2014 \| parent \| context \| favorite \| on: Nassim Taleb: We should retire the notion of stand... `A stock (or a fund) has an average return of 0%. It moves on average 1% a day in absolute value; the average up move is 1% and the average down move is 1%.` How does that yield an average return of 0%?

baking on Jan 16, 2014 | [–]

The usual way to do this is to take the natural log, so an up 1% day followed by a down 1% day (or vice versa) will always net out to a 0% change.

MaysonL on Jan 15, 2014 | [–]

It goes up a little more often than it goes down?

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact