[sevensa]

Tell me what does a 2.15 scar ratio tell you? It tells you that a 1% return gives you a 2.15% return in relation to your original principal.

It tells me that for every $1 I had in the beginning of the calculated period, I now have $2.15. In other words, each dollar returned 115%.

Here is an example:

12 months ago you had $100 in your account and today you have $215.

SCAR = ((215 - 100)/100) + 1 = 1.15 + 1 = 2.15

Return on Account = (215 - 100)/100) * 100 = 1.15 * 100 = 115

The only difference is that for SCAR you add 1 to 1.15 to get 2.15 and in case of ROA you multiply 1.15 with 100 to get to percentage return of 115. Why do you think adding 1 instead of multiplying with 100 gives you more information?

According to your comments it has to be complex to have value.

Talk about missing the point. We have said it is virtually the same thing than return on account and doesn't give you additional information. Please read the previous posts again.

You both have completely missed the point because of your (not invented here) superior intelligence.

There is no reason to come with personal attacks because we have shown you that mathematically SCAR ratio is virtually the same thing as Return on Account calculated over the specified period. Math is math.

Have either of you made 82% in a 12 month window?

What does that have to do with anything? Just because someone made 82% last year doesn't mean he what he say about math has more credibility or that someone who didn't, has less. If you stop believing whatever that guy is telling you because he made 82% and look at the math, you will see yourself.

[Dacamic]

There is the possibility this thread is more about promotion than enlightenment. On the chance my skepticism is unwarranted, I offer a link to the ROI calculation per Investopedia:

http://www.investopedia.com/terms/r/...investment.asp.

With respect, as Sevensa has said, SCAR is mathematically identical to ROI. Furthermore, the suggested interpretation for SCAR is to describe 1% x $20,000 as 2% x $10,000, which doesn't seem a revolutionary idea, either.