No. of Recommendations: 16
When I was just getting started with investing, I remember they had two portfolios. I think it was rule makers, and rule breakers. We had the 90s boom, and they very proudly showed how they were beating the market. Then we had the .com crash and they started trailing the market.
What did they do? They stopped publishing their results and claimed there was some problem with their data provider. This went on for a very long time.Their slide in terms of performance and behaviour coincided with a big slide in their solvency.
Speaking from experience, having to make payroll will focus the mind tremendously, and sometimes trigger unfortunate decisions.
It is indeed sad that they have become the exact thing they mocked in the 1990s. Their emails are now astounding examples of the "shrill shill".
But I guess they have to make a living, and it is a fine demonstration how natural evolution in business models favours the most remunerative, not the most respectable.
Jim
As a totally unrelated aside, a bubble is a terrible thing to waste.
For those who miss it, I have an investment system very well suited to bubble times like that : )
Anybody remember super high growth / momentum investing?
Totally the wrong board, but maybe it has entertainment value
It can't get much simpler than this:
* Start with the ~1700 stocks in the Value Line database.
* Find the 40 stocks with the highest reported five-year rate of sales growth per share. (this field is updated only annually for each stock)
* Of those 40, buy equal dollar amounts of the 10 stocks which are currently furthest above their respective 52 week low prices. (measured one day before your trading)
* Hold those 10 stocks for a month, repeat.
Unsurprisingly, this likes exuberant markets, including bungee rebounds.
The surprising thing is that it does not that badly on average the rest of the time, too.
Final result 28.8%/year 1997 to date versus 9.0% for the S&P 500, at least in backtest.
On relatively sane risk metrics (size and frequency of rolling years having a shortfall below a reasonable return), this 10 stock portfolio is only a tad riskier than the S&P 500.
Mixing a little of this yeast into the "loaf" of your portfolio wouldn't be so crazy.
Come to the dark side!
Figures after trading costs, includes dividends, no provision for tax.
Year Screen S&P
1997 43.3 27.9
1998 86.1 34.5
1999 172.5 18.4
2000 19.3 -10.8
2001 7.3 -8.0
2002 -45.9 -18.9
2003 154.5 23.0
2004 32.0 8.9
2005 14.2 7.5
2006 28.1 13.8
2007 -2.4 1.9
2008 -29.9 -32.9
2009 144.0 25.5
2010 25.5 14.2
2011 -1.0 2.5
2012 -4.0 17.1
2013 106.8 27.6
2014 23.8 12.9
2015 9.9 1.9
2016 28.1 14.4
2017 36.8 21.8
2018 -8.1 -3.5
2019 12.4 29.9
2020 127.3 16.9
2021 36.5 30.5
2022 -10.9 -19.0
2023 18.4 17.5 (half year not annualized)
