Originally Posted by Duritz

Here's one for the mathematically sound -

How do you calculate what's a safe % of your bank to outlay on a system, given it's strike rate, in order to survive any reasonably forseeable run of outs?

Examples:

System A has a 22% s/r, ave div $4.80. What's the % of bank you should outlay and be safe?

System B has a 6% strike rate, ave div $17.20. What's the % of it you should outlay and be safe?

Obviously the % outlay would be less for Sys B than A because it will have longer runs of outs, but how do you calculate it?