Subject: Re: Combs to leave
"I've always felt that surely there is some way to capture a bit of that tail wind..."

Sorry to be slow, but I'm not sure that I'm following the proposed approach. Are we trying to avoid the stocks that are likely to underperform or buy the stocks that are likely to outperform? Or some combination of both? Why not just buy the top 5% by ROE (or sales growth or earnings yield or something positively correlated with future return)? Jim has shown ROE to be a good choice. A histogram or plot of return versus decile likely has a normal or skewed normal distribution. The magic formula certainly does (Table 7.2 in "The little book that beats the market"), with the top decile outperforming the median and the S&P 500 by 5 percentage points. What am I missing?