D.I.Y. Your RRSP

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Combo Trend, Yield & P/E Calculator: StkCht

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The Basics - Rate of Return From Charts
Row 1: ends and length of logarithmic line touching EMA twice; gives chart R.O.R.

Show Result
StockScores.Com Rate of Return has two parts; cash paid to you and growth of the ETF.

includes The dividend is cash paid. Growth can be seen as an upward slope.

dividends. Yahoo Charts The Yahoo chart slopes down. Stockscores chart to the left slopes up because dividend is mixed in.

exclude them

Here is the HAC.TO , with a red dotted line drawn in after you hit annotate:

The cursor has been moved to and we $17.13 for the price five years ago. After entering that, we moved the cursor to the and measured $24.69. The calculator returns about 7%/yr as .

Removing Up and Down Price Jumps:

The red dotted line has been moved to JUST TOUCH the red EMA200 line in two places (eliminating Until the next line - here we bridge over two wiggles to pick the slope out of it

volatility). Any straight line on the chart behaves like a bond yielding interest and the dotted line follows the price growth of the ETF, ignoring noise.

Why it works: The charts we use are logarithmic. That converts an up-swooping price to a straight line. (The Y-axis values are closer together near the top). The slope of the line then translates into %/yr in the calculator.

Secondly, the price fluctuates in what are called Elliott Waves. The EMA200 suppresses these waves if they are shorter than a year, and bridging over two of the remaining wobbles will pick off the slope over a period of about four years.

The EMA responds well to slope measurements, but the the SMA200 that brokers commonly use tangles itself up attempting to measure %/yr. Avoid it.

The Basics: Measuring Chart Volatility

Row 2: Top and bottom of range at a single date:
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The math is obscure, but the resulting procedure is something we can easily DO. Open an independent tab with a chart and we will measure its Elliott waves.

The same formula for Rate Of Return can give the amount of Up - And - Down variation within one year; just measure tom at any :

Step One: draw in a red dotted reference line just The idea is to measure rise and run of a ramp.

The EMA wiggles due to volatility, so we bridge from peak to peak.

touching the red EMA200 twice.
Step Two: draw in another (blue) line parallel to it.
Step Three: Pull that line up so it just touches the top of the jumping and pull another one down to just touch the bottoms during a normal year. (Ignore COVID for now.)
Step Four: Reading the cursor position in the gray area at the bottom of the plot, measure the top and the bottom lines at ANY time on the plot. We found:
- The top line measures $39.47 in that gray area and the bottom line is $33.59 at the right hand side (now).
  - The actual dollar volatililty is 39.47$ minus 33.59$.
  - Percent calculated is dollar volatility / green line ($36.46).
- Include the date when entering these numbers above:
  
  Row 3:

At the end of Row 2, the program calculates the mid-point, along the green line, and projects it to $36.46 for the current date (trend). The volatility is shown in Row 3, first as a percentage relative to the green line and then as the number of years it takes the green line to climb from bottom to top of the trend.

This gives us something to go on when deciding whether to buy it. The most one can gain by waiting is half of the volatility, or 0.9 yr.

Why it works: Elliott Waves are a result of decisions by investors and their brokers. Decisions are guided visually, so we draw in the two blue lines visually too, defining a "statistical range" rather than something like Beta.

Percentages are referred to something and the program assigns the Geometric Mean of top and bottom at the date of measurement to be 100%; the green line. Thus it is only weakly related to purchase price unless you buy at the green mid-line.

The Basics - Choosing an Entry Point
Row 3: Type in market price and make the decision:

Show Result

Above the middle of volatility, store new $$$ in bonds or HAC.
Buy and Hold after corrections. (Do not trade after that.)

Here is the chart for Low Beta again, with

a red dotted line drawn in after you hit annotate, and two blue lines drawn parallel to it, just touching the tips of the volatility.
Line 2 below has been filled out with 33.59 and 39.47 at September 9.
Then a green dotted line shows the mid-way point and we can purchase a stock at or below it ($36.5) to avoid paying too much. The measurement above indicates that the green line will take almost a year to catch up with where the market was when this screen shot was trapped.

Here is how to enter data for the Low Beta ETF and test for predicted entry advantage for buying below the green trend line:

If the entry price was higher then the green line this will be shown:

Why it works: Our trick of monitoring

of dividends and making sure they grow at the same

rate as price ensures that we avoid speculative "growth" stocks.

After price wanders up too much many brokers will stop recommending it because of low Dividend

. That means that the average price (green line) is partially controlled by dividends. Ditto for earnings growth

, because other brokers will focus on the

ratio and stop recommending it when earnings are low, also holding the green line down. If the inverse of P/E

is lower than the dividend yield that will also raise red flags because

will be more than 100% of earnings.

Thus if a stock has really good P/E and dividend characteristics but is above the green line, we can park our $$$ (maybe in HAC.TO) for a while and wait. (See below.)

When it doesn't work The rise of price is actually driven by expectation of future earnings. That means there are many brokers who recommend based upon the "story" of a company rather than past performance. If R.O.R. measured on the chart is very high, we should let investors with deeper pockets have the gain and take the risk.

Things take a while to get corrected when the price R.O.R. out-runs Earnings:

To the left, P/E rises until the stock goes out of favor. Then it will drop as shown or go flat and in due time an attractive P/E will develop and cause another run-up. (See below.)

Obtaining Slope of Other Metrics:
Rows 4 to 7; type in dates and yearly payouts:

0 %/yr.

^nd Data Pt: Show Result

These pairs of rows serve the same purpose as the top row; they define two points on a straight line and the number of years between them. However, the time is entered as two calendar dates. The result is the slope of the line, expressed as %/yr growth rate of dividends. (The pair of rows for earnings work the same way.)

To keep it simple, the four user inputs can run the Continouous Interest Equation through only two points.
Advanced users can use "|" characters to separate annual values and do a Least Squares Fit through many samples.

These are more than inputs; they . If dividend data is posted on web sites quarterly, with a clutter of dates, spaces etc., you can copy a year's worth and paste it into their upper right . If you highlight the clutter and replace it with "+" characters, notation will convert that into a simple sum of four quarters. If you want to average two years, appending ")/2" with an opening bracket will do that.

Reducing Many Points to a Pair:
One can enter X and Y points for dividends, earnings, book value etc. in a spreadsheet, prepare a Ln(Y) column, and then run a straight (logarithmic) line among the points using the SLOPE() function. Multiplying by 100% will then yield an average R.O.R. for whatever metric you obtain.

The sample spreadsheet provided will recalculate two data pairs to enter in the boxes above. (They are on a line that is fitted through scattered data.) Be aware, though, that if X is expressed as dates, you need to divide by 365Days/Yr.

Entering Many Points in Upper Dividend/EPS Boxes:
The algorithm in the spreadsheet has also been applied below to through of someone working in . These entries may also be used instead of a spreadsheet to reduce to (separated by "|" characters) to enter in the upper Dividend/EPS box of the main calculator.

The Basics - Doubling Time

supplies the Continouous Interest formula A = Pe^rt. Later it will appear on charts as straight lines, but for now let's think of it as just another calculator. Plugging in ), t) and Pal) below puts stocks and bonds on the same footing for when you retire:

DOUBLING-TIME EXERCISE: E.g. ten k invested in an ETF called HAC.TO and just held returning 7%/yr would grow to 20k in ten years.

Try rates like %/yr with

retirement in years after

setting aside $k now.

Result A = $20751k.

The top box ETF is for overall Interest or dividend per year, plus any growth.

Express it as % of amount invested.

return of an investment. Try an Measured by this program as the %/yr slope of a StockCharts chart.

"interest rate" of Bonds have zero growth rate, yielding only interest.

Stocks' growth acts like interest, returning more than purchase price.

10%/yr; available right now from banks.

Try an aggressive rate of 20%/yr; available for now from an ETF holding Amazon, Google etc.

Here is the pattern you will find:
Divide the %/yr growth rate into 70 and you get doubling time.

Caveat: the above numbers do not take into account the effect of inflation:
.
Expected : %/yr. Purchasing Power: $20751k.

A Deeper Dive:

actually uses the approximate formula A = P(1 + r/n)^nt that is often used instead of the continous (exponential) formula above. The symbols mean

Top Box; (This box will more often be set to "rate".)

That translates into extracting %yr Rate of growth of charts, dividends or earnings.

Answer A (selected first box; displayed at bottom) is given by

your original P=$10k (second box) invested at

interest rate of r=7.3%/yr(third box)

compounded n times per year ( )

and sitting there for t=10 years (fifth box):

Notice that setting n=a zillion (continuous) eliminates it and changes the formula to A = Pe^rt=$20751k. This formula is used by banks to calculate interest.

To do that it has to be changed to r=Ln(A/P)/t.

Notice that it is not yield.

That happens to be the formula for the e^rt swoops upward on a normal plot.

A "log plot" makes it into a straight line by compressing the upper part of the Y-axis. "log plots" that market websites show us.

This same calculator can be reversed, to extract the Growth Rate from pairs of dollar values, growing or shrinking over a time in years. That is the mode in which we use the equation to manage Dividend and Earnings Growth rates, and throughout the website's calculator. It can also be extracted from scattered data.

Why it works: This equation's growth rate r applies to every $$$ that is in an account at a particular instant (by averaging the whole account or ETF basket). That includes all accumulated previous growth (or decay in the case of inflation). That is also if its earnings track its total investment and/or if its share of the market is expanding or the company is shares.

Now comes a trick. Human perception also works this way; we focus on percentage change rather than of things. Brokers look at charts to make recommendations whether to invest new money in stocks or bonds, and their thinking works on percentage change too. That makes their decisions follow this Continuous Interest Equation, and we can predict their behavior with simple straight lines!

..0	20..1	20..2
20..3	20..4	20..5
20..6	20..7	20..8
20..9	20..A	20..B
20..C	20..D	20..E