No. of Recommendations: 11
I just grabbed the data to see. Compared the 12-month total returns for every rolling 12-month period March 2012 (QQQE begin) to July 2024
QQQE beat QQQ 28 times.
QQQ beat QQQE 108 times.
One month returns over the same period.
QQQE beat QQQ 55 times.
QQQ beat QQQE 81 times.
We get it, the biggest companies have done very well in the last 12 years. You can slice it and dice it as finely as you want, and you will always reproduce the last 12 years' outperformance of QQQ over QQQE. But none of this contradicts the fact that the biggest companies don't USUALLY do better than the average.
Fair odds for rolling two dice and getting two ones would be 11/1 (or 1100, using the American (Moneyline) odds, meaning that for $1 bet each time, you would make $11 for each snake eyes and lose $1 for any other roll. So in 144 rolls, you would win 12 times (with winnings of $132), but you would lose 132 times (for losses of $132), breaking even. If you had been offered worse odds, like 9/1 (or 900), with fair dice you should have expected to win 9 times (winning $81) and lose 132 times (losing $132), and you would have been well behind, losing 35c on average on each $1 bet. But if you took those bad 9/1 odds and happened to get 20 snake eyes instead of 12, then you would have done well despite the probabilities, with $180 in gains offset by $124 in losses.
Now you have to decide how to bet for the next 12 years. You are going to go for snake eyes again?
Maybe the dice are not fair after all. Or maybe you just go lucky. It's your bet, you can do as you choose, but counting how well you did each month or each trimester or each year by betting with odds that do not reflect the long-term average is not a convincing argument.
dtb
