Not necessarily.
The motivation for asking could be to demonstrate to others that there is a distinct lack of evidentiary support for deeply entrenched beliefs.
Anyway, you are after a system right? A magic formula? One that you can plug numbers in or read the direction and reach El Dorado yea?
Get real man.
Whilst that's not quite how I would define a system, I am otherwise largely agreeable.
I'm not quite sure that I correctly understand the point you're trying to make here.
A formula/system/algorithm/model may lack the self awareness and capacity for independent reasoning, however, its creator and subscribers will have their reasons (irrespective of validity or lack thereof) for their decision to create/operate it.
Couldn't this simply be seen as a rational enhancement of a valid system pursuant to an appreciation of that system's scope and intent?
I'd agree that sometimes when additional layers of complexity evolve, the inner workings can become more deeply obscured.
I'd also agree that many(but certainly not all) do operate with an (at best) limited understanding of those inner workings.
However, the failure of some, to appreciate those inner workings, needn't necessarily invalidate those additional layers.
That may well be true of some people, but I sincerely doubt it could be true of all people.
Yeah, get real tech, stop trying to scalp us out of our secret formulas, man, why don't you just do some hard work, man.
According to you, I have already given "my" secret formula? No?
Instead of trying to be smart, why not pick a company or two that you got right or got wrong, and show us where you got it right and where you got it wrong.
I bet you would have no idea what goes right and what goes wrong after all that DCF modelling. Which kinda beg the question, why would anyone do something they have no idea and put no faith in it being reliable or not.
Anyway, I wouldn't get too smug if I don't really know the implication of how my own model works.
Mate you are a special kind of special. Your crazy assumptions about what people are talking about have completely warped your perception of the discussion going on here.
In this case, you assumed my statement about long term stream of cash flows (which is a fact) means that I use DCF modelling in my investment decisions.
Instead of trying to be smart, how about you leave this thread so it can go back on topic.
:bad::bad::bad::bad::bad:
Yes. That is what is going on here, I have no idea about the assumptions, implications and returns of 3 seperate model portfolios which I have constructed through painstaking research and real time trading over 7+ years.
I wish this forum had the option to hide posts from specified users.
If you are actually interested in pursuing this tech, I would advise getting a membership to CXO Advisory. Generating evidence which is robust is difficult and time consuming, so a lot of evidence is not free access.
http://www.cxoadvisory.com/what-investing-approaches-work-best/
I'm not sure if this belongs here or not Tech/A, but i know you're looking for ideas for systems....I came across this podcast last night, its an interview with the CEO of Systematic Alpha, a NY boutique fund. They use various automated market neutral strategies that take advantage of mis-pricings from liquidity differences, among other things for profit..
I was quite impressed on how much he talked about his strategies, in particular the ES/FTSE/6B spread. This gives you ideas for many more market neutral strategies.
TopTradersUnplugged
CanOz
No I'm not.
I'm looking for methods used to give evidence used to support results.
Howard is very clear with his---what is required to verify results.
To prove robustness.
Well please accept my apologies then, I thought you were also still considering ideas for systems....
My search continues.
Rubbish in Rubbish out.
It occours to me that the market itself provides absolute empirical evidence for the outcome of one method of investing, (again only historical with no logical assumption it will hold true in the future.), that is extreme long term buy and hold of the index. The total rate of return has been well in excess of inflation and tax for any longer period of time you choose. Maybe that is a sort of benchmark for what you are looking for?
You know that Index investing is a very crude trading system. It is basically a weighted trend following system. Rewarding the market cap gainers and culling those that have decreasing market cap.
So if that dumb system "works" so should some other systems. But that still doesn't answer Techs question about robust techniques to test for such success .
It's not necessarily so cut and dried as that.
Cap weighting is passive and scalable, a globally cap weighted portfolio (including credit) is the only portfolio which, theoretically, all market participants could hold simultaneously. With the big assumption, of course, that the market can appropriately price the issuance of shares.
Research and ratings organisations like MSCI and S&P add extra rules (like liquidity filters, or economic representativeness, etc) and it is generally those rules which actually constitute the differences from a raw cap weight benchmark.
You know that Index investing is a very crude trading system. It is basically a weighted trend following system. Rewarding the market cap gainers and culling those that have decreasing market cap.
So if that dumb system "works" so should some other systems. But that still doesn't answer Techs question about robust techniques to test for such success .
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