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Hey all. I just finished reading the Gardners' new book, quite a revelation for a neophyte like me. But, by all means, pick it up sometime. What I admire in their writing is that it's not ideological and dry, like most finance books. But, of course, a few questions emerged for this rather dim bulb. Oh, by the way, did anyone win a hat by finding a typo in there? I thought maybe spelling Treasuries was a misprint somewhere but I forget where? Isn't the proper spelling in finance gibberish Treasurys? I m thinking there must be some Easter egg in there.

But, from p. 211, "You can't sell stocks in your 401(k) to buy bonds in your Roth IRA or that might be considered a distribution." Can someone elaborate on what they mean exactly? I thought that, barring any wash rule violation, you re free to trade in retirement accounts with impunity?

Also, perhaps a dumber question, what is the math formula for figuring percentage variation they site a few times. (I ll append their example with Buffalo Wild Wings.)

52-week high 44.19
52-week low 18.25

variation 58.7%

I mean how do you come up with that percentage? Yes my mom was a math teacher but my siblings were all the bright stars.

By the way, is TD Ameritrade OK for a non-active trader or is that geared more toward active ones?
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jamiegumm: "Hey all. I just finished reading the Gardners' new book, quite a revelation for a neophyte like me. But, by all means, pick it up sometime. What I admire in their writing is that it's not ideological and dry, like most finance books. But, of course, a few questions emerged for this rather dim bulb. Oh, by the way, did anyone win a hat by finding a typo in there? I thought maybe spelling Treasuries was a misprint somewhere but I forget where? Isn't the proper spelling in finance gibberish Treasurys? I m thinking there must be some Easter egg in there."

Welcome. I have not read the book.

"But, from p. 211, "You can't sell stocks in your 401(k) to buy bonds in your Roth IRA or that might be considered a distribution." Can someone elaborate on what they mean exactly? I thought that, barring any wash rule violation, you re free to trade in retirement accounts with impunity?"

Sounds like gibberish to me; or some major ontext is missing. You are mostly correct as to your understanding. There are some federal limits with respective to permitted investments.

"Also, perhaps a dumber question, what is the math formula for figuring percentage variation they site a few times. (I ll append their example with Buffalo Wild Wings.)

52-week high 44.19
52-week low 18.25

variation 58.7%"

I mean how do you come up with that percentage? Yes my mom was a math teacher but my siblings were all the bright stars.


(High Value - Low Value)/High Value

(44.19 - 18.25)/44.19 = 25.94/44.19 = 58.7%

Math formula explanation only without comment as to whether that number means much of anything.

Why not use (High Value - Low Value)/Low Value, and calculate 142.1%?

'By the way, is TD Ameritrade OK for a non-active trader or is that geared more toward active ones?"

I have no idea. Seems like it would be ok.

Regards, JAFO
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"You can't sell stocks in your 401(k) to buy bonds in your Roth IRA or that might be considered a distribution."

Have not read the book, but if you take the statement literally - it implies that the proceeds from the sale of stock in the 401(k) would be used to purchase bonds in the Roth IRA. That would be a distribution from the 401(k), or if done correctly, possibly a conversion from the 401(k) to the Roth IRA.

I mean how do you come up with that percentage?

In this case:

(44.19 - 18.25)/44.19 = 0.587 or 58.7%

In general, (52 week high - 52 week low)/52 week high

AJ
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what is the math formula for figuring percentage variation they site a few times

I haven't read the book either, but there are a few terms that if used, suggest the material you're reading isn't worth the paper its written on....and one of them is the term '52 week high'. I know some of the media likes to use this, probably because it makes the numbers they then quote sound more dramatic. But what exactly does '52 week high' really mean? Effectively, nothing. This metric takes an ephemeral number that is probably there by accident or a quirk of the exchange, and uses it as an anchor point for making some direct or implied conclusion about that stock/MF.

A much better metric of the change in a stock's price is the moving average, which is what professional investment managers will use along with measures of price variance to address the risk of a given security.

BruceM
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