Alternate Route

Jul 28, 2009 - Significant Digits

AR Index     594.20  +58.97  (+11.02%)

Stocks of individual interest
Toyota  79.88  +3.77
GM        0.41    -.0.10
Ford      7.27    +1.08

Dow 9108.51  +260.36   (+2.94%)

There's a concept in math called significant digits or figures which basically deals with rounding.

GM is in danger of being rounded right out of significance, at least in the AR Index. When I started the index, I weighted Ford, GM, and Toyota equally. In other words, a given percentage change in any of them would have the same effect on the index.

 Just for curiousity's sake, if you plug zero in for the value of GM now, a 100% decrease, the index would only drop by just over 1%.

Smart investors are staying away from GM right now. Sort of makes you wonder what we the people are doing owning a big chunk of GM doesn't it?

3:06 am | Categories: ar index, commentary Permalink | Alert Administrator

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