Market
Reasons for “Misalignments”
Exchange rates which do not reflect the PPP value are said to be “misaligned” and it is assumed therefore that they have to revert towards PPP. Such misalignments are seen as being caused by temporary distortions, either to the price of the good or the exchange rate, which should quickly be eliminated by a rational, [...]
Pre-Bear Market Comparisons
It is interesting to compare the results of the 1971-2000 period to the 1971-2004 period, which includes the bear market of 2000-2002. Using the 90% (buy) and 80% (sell) parameters between 1971 and 2000 would have produced rates of return while invested of 34% and maximum drawdowns of only 8.6%, with 72% of trades profitable. [...]