BLSH Model - the Base Case

Actually this is the base case for our BLSH model. The previous post was the result of the buy/sell factor of 1.07. Our base case was defined with the buy/sell factor of 1.06. However, the little change in buy/sell factor has made some difference in the model result. Based on this, we can state that the buy/sell factor is a sensitive parameter in the model.

One very critical simulation result is that the cash reserve is negative during the worst time of the bear market. That means we need to use margin to finance new purhases of risky asset shares. In real operations, we might not be able to do this due to many factors such as manager's confidence in the overall bear market conditions.