Although I have checked the parasitic draw on my Excursion in the past, I'd never photographed that test. In fact, we suggest a 25-milliamp draw is acceptable and anything that exceeds 100-milliamps indicates an electrical issue that needs to be addressed. In that same conversation, it was suggested that a 200-milliamp draw was "acceptable." That is certainly not the case. That is why vehicles that only see weekend or occasional use (this includes boat owners) should have their batteries maintained with a quality battery maintainer, like the OPTIMA Digital 400 or Digital 1200 Charger & Maintainer. When that happens, sulfation begins to diminish both capacity and performance. The combination of a significant parasitic draw and long periods of non-use can easily cause voltage to drop below 12.4 volts. The key to long life for any battery is to make sure battery voltage doesn't drop below 12.4 volts. If a vehicle is driven daily, the alternator should probably have no trouble properly maintaining the battery, provided that daily use doesn't consist of a multitude of five to ten-minute drives. Until the day comes when battery maintainers are standard equipment on all new vehicles, we just need to be vigilant with our batteries. As even more electronics are packed into newer vehicles, those trends are both likely to continue. Some high-end exotics even come with battery maintainers as standard equipment. Some automakers have responded by shipping their vehicles with solar chargers, to keep the batteries charged as much as possible between the time the cars leave the factory and when they arrive at the dealership. However, just because an 85-milliamp draw may be normal, that doesn't mean an 85-milliamp draw won't adversely impact battery lifespan and performance, if the battery isn't properly-maintained. Memory seats, mirrors, radio presets, satellite radio, GPS systems, Wifi and lots of other fancy electrical gadgets have combined to greatly increase the electrical demands of many newer vehicles. As I explained the math behind parasitic draws, it was suggested that an 85-milliamp draw is not all that uncommon on newer vehicles. After you finish, you might fairly conclude that the entire exercise wasn't worth the effort, and just go back to mean variance optimization.I was having a conversation recently on an Internet message board, when the subject turned to parasitic draws or "key-off" loads. Though since you're trying to estimate a tail event, it would probably require a huge amount of simulated data and take a long long time to run. I would think that would give you more robust results. So to get optimal portfolio weights, you'd have to simulate some very large number of returns from each of these distributions, and then calculate (let's say) the 99th percentile portfolio draw-down for each set of portfolio weights, and use that function in your optimization. As far as I know, none of those distributions have both finite variance and are closed under linear combinations, so your portfolio returns wouldn't have the same distribution. Or, if you wanted to get fancy, you could use all your historical data to fit your favorite fat-tailed distribution. Instead, you might just include terms in your optimization objective that penalize negative skew and penalize positive kurtosis. Why? Because minimizing historical draw-down is effectively the same as taking all your returns that weren't part of a draw-down, and hiding them from your optimizer, which, as Tal mentioned, will lead to portfolio weights that are a lot less accurately estimated than if you let your optimizer see all the data you have. Third, (and here's the main point) if returns are very non-normal and you really do want to find portfolio weights that minimize expected draw-downs, you still wouldn't choose weights that minimize historical draw-down. Minimizing variance is the same as minimizing expected draw-downs. Second, if you really do care about draw-downs, if returns are close to normally distributed, the distribution of draw-downs is just a function of the variance, so there's no need to include draw-downs explicitly in your portfolio construction objective. First, and simplest, is that people care about variance.
0 Comments
Leave a Reply. |