Winning Strategies

[bet2win]

As has been said dont waste your time copying a bunch of investment strategys that have been successful over X number of years.

There is no get rich quick method, every stock has a different story and the market always evolves.

People with knowledge are more able to make better decisions as the market changes.

[DOTTT]

Humm I guess you can say the same thing about value investing, methods such as Ben Grahams and Warren Buffets. Just because they've been successful in the past doesn't mean they will be successful in the future.

[DesertCat]

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Here are the results of the 4% rule tested on the Value Line index. I originally wanted to run this on the S&P 500 but was unable to get the data. The 4% system gained 10.9% a year from 1961-2006, but get this drawdown was held to a minimal 13%. ValueLine buy and hold returned 3.3% a year with a horrific 76% drawdown.

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What does this mean? Are you saying the valueline picks have only returned 3.3% per year for the last 45 years? Even if you aren't counting dividends, that sounds wrong. The market as a whole is probably up 9-10% per year during that time.

[DesertCat]

[ QUOTE ]
Humm I guess you can say the same thing about value investing, methods such as Ben Grahams and Warren Buffets. Just because they've been successful in the past doesn't mean they will be successful in the future.

[/ QUOTE ]

Methods such as Graham's and Buffet's aren't mechanical formulas. The successful practitioners have results proven in the real world, not through backtesting. And there are many "value funds" where the managers don't get it and don't have good results.

If Zweig's formulas are so great, why does his fund suck so bad?

[DOTTT]

His funds don't employ any of the mechanical strategies he has developed. I imagine one of the reasons for this is because of compliance issues in the mutual fund industry.

[bet2win]

[ QUOTE ]
Humm I guess you can say the same thing about value investing, methods such as Ben Grahams and Warren Buffets. Just because they've been successful in the past doesn't mean they will be successful in the future.

[/ QUOTE ]

lol that is complete crap.

If a company is undervalued then eventually these companies will produce higher profits and thus their share price will go up. The problem is you need to spend a lot of time assessing a company.

You cant compare that with some technical indicator that says stock will go up or down based on X and expect it to work in every condition.

You have to look at the big picture and take a lot of things into account.

If people had indicators that worked well over the longterm they wouldnt be writing it in a book or telling people about it in seminars. They'd be geared to the max and would make hundreds of millions of dollars.

[DesertCat]

[ QUOTE ]
His funds don't employ any of the mechanical strategies he has developed. I imagine one of the reasons for this is because of compliance issues in the mutual fund industry.

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You "imagine"? What compliance issues? You should really think this through. He doesn't even use his own rules, and has a horrible track record. You need a better answer than some vague comment about "compliance issues". I am aware of no rules preventing his fund from following his mechanical formula.

Plus you repeatedly post performance numbers for value line that are far below actual stock market performance. If Zweig's rules are so great, why the need to use false benchmarks to compare against?