robls
Recycles dryer sheets
- Joined
- Sep 29, 2003
- Messages
- 169
FYI. Found this article very interesting:
Buy-and-Really-Hold Will Suck Your Portfolio Dry
Buy-and-Really-Hold Will Suck Your Portfolio Dry
to make his case for a portfolio using "relative strength weighting",This may get you thinking: If a small list of securities accounts for the market’s long-term returns, why not avoid all the headaches and losses you’ve suffered recently by carefully choosing these superstocks?
Simple: Because a portfolio of "carefully chosen" equities could easily wind up with none of the best-performing stocks in the market - and thus produce flat or negative returns over many years. Missing out on even a handful of superstocks can leave you short of your target.
So, he missed one link. Why don't you comment at his "blog" about the oversite. Sure he will provide a link.Well sure they want you to trust them to pick the 25 percent that are the top performers--you're reading an article from "the official blog" (as opposed to all those unofficial blogs) of "an independent and privately owned registered investment advisory firm." Buying and holding ain't gonna make them much of your money.
Interesting too that the official blog includes a chart from "Dr. French's own website" without sourcing it.
I'm intrigued by the very hostile reception to this article, and I'm a little concerned that the main points are being missed.
Mike Moody
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I'm intrigued by the very hostile reception to this article, and I'm a little concerned that the main points are being missed.
...........
I apologize if my tone did not make certain readers happy, but I think it would be worthwhile to take the conclusions seriously.
Mike Moody
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As I'm sure you know, an investment advisor is legally prohibited from making guarantees of any kind. Of course, an index fund can probably assure you of NOT beating the market, since, by definition, they will provide the index return minus fees. There are return factors that have demonstrated ability to outperform. Relative strength and deep value are the two most prominent factors. The reason many active managers do not outperform is often related to agency factors and/or lack of execution.
No controversy there? Really? In other words, just about everyone agrees that "buy and hold typically loses money"?1. buy-and-hold typically loses money, according to both Bernstein/DFA and Blackstar Funds. No controversy there.
Yes, and what a convenient excuse for not standing behind your claims. Whatever you guys pay your industry lobbyists, you need to give them a raise....As I'm sure you know, an investment advisor is legally prohibited from making guarantees of any kind.
3. buying strong stocks works better than indexing, according to Dr. Kenneth French's own website.
I think the NYT columnist Maureen Dowd takes the cake for this. She has been known to leave words out of quotes, changing the meaning of the sentences in the process. She is a "journalist."It's rare to find anyone taking a quote out of context any more than this. Good example of how to lie.
Steve
1. buy-and-hold typically loses money, according to both Bernstein/DFA and Blackstar Funds. No controversy there.
2. the reason indexing works better than buy-and-hold is due to active management and index weighting paradigms. No controversy here either; this is why indexes are reconstituted periodically. Lots of literature about this topic exists.
3. buying strong stocks works better than indexing, according to Dr. Kenneth French's own website. Again, not controversial, although Fama and French do refer to it in one of their articles as "an embarrassment to the Efficient Markets Hypothesis." There is also a lot of academic research on this topic, starting with Josef Lakonishok in 1993. In June, Morningstar is incorporating momentum (the academic term for relative strength) as a return factor in their fund ratings. This is consensus opionion, not left field stuff.
In short, I believe all three major contentions are well-supported by the facts.
I'm intrigued by the very hostile reception to this article, and I'm a little concerned that the main points are being missed.
1. buy-and-hold typically loses money, according to both Bernstein/DFA and Blackstar Funds. No controversy there.
2. the reason indexing works better than buy-and-hold is due to active management and index weighting paradigms. No controversy here either; this is why indexes are reconstituted periodically. Lots of literature about this topic exists.
3. buying strong stocks works better than indexing, according to Dr. Kenneth French's own website. Again, not controversial, although Fama and French do refer to it in one of their articles as "an embarrassment to the Efficient Markets Hypothesis." There is also a lot of academic research on this topic, starting with Josef Lakonishok in 1993. In June, Morningstar is incorporating momentum (the academic term for relative strength) as a return factor in their fund ratings. This is consensus opionion, not left field stuff.
In short, I believe all three major contentions are well-supported by the facts.
Blackstar's research showed that buying strong stocks made sense. It was really Bernstein/DFA that recharacterized the research as supporting indexing--Blackstar would not agree. I don't think Mr. Bernstein has grounds to be upset with me; I'm characterizing the research the way it was originally intended.
I apologize if my tone did not make certain readers happy, but I think it would be worthwhile to take the conclusions seriously.
Mike Moody
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I think the NYT columnist Maureen Dowd takes the cake for this. She has been known to leave words out of quotes, changing the meaning of the sentences in the process. She is a "journalist."
Mike D.
No, I think it was a swipe at Maureen Dowd -- note the "quotes" around the word journalist...All rightee then, that makes it okay to do
I've never heard of the govt forbidding a "satisfaction guaranteed or your money cheerfully refunded" clause either.Yes, and what a convenient excuse for not standing behind your claims. Whatever you guys pay your industry lobbyists, you need to give them a raise....
Speaking of trolls, Mike, I'd check the IP address and background of that guy "Rob" who leaped on your blog to make the first comment. How appropriate that you two found each other so quickly-- I believe he's still 100% cash, and I'm sure he's looking for good advice on picking winning stocks!Give it up Mike, you'll do nothing with your sales pitch here other than draw fire from those of us who are or who aspire to FIRE.