Post #18308 by Knighted on the Berkshire Hathaway board

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- Manlobbi

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)

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For those without the skill to analyze individual firms and project their likely returns better than the average bear, the closest thing to a free lunch that I know of is to skip cap weight funds.

Historical data makes a compelling case for the equal weight advantage, but cap weight has been trouncing equal weight since RSP and QQQE's inception over 6 years ago.

I try to avoid reading too much into recent performance, but I've seen many strong historical patterns that held consistently true for decades fall apart suddenly and lost whatever advantage they had. Or worse: mean reverted.

And after 6 years time, it's making me wonder if the equal weight advantage over cap weight is another example of this.

Do you have reasons to believe that the advantage is enduring, and that the last 6 years is just a short term (or maybe it's now graduated to "medium term") fluke?

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