Post #2768 by mungofitch on the Mechanical Investing board

Investment Strategies / Mechanical Investing ❤

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The elephant in the room would be a cap weighted NAS100 holding, like QQQ. I have a hunch that QQQ would have beaten an equal weighted NAS100 by knockout in a backtest, with 1/100th of the effort, which is of course not a guarantee of future returns.

Two minor comments (from an admitted QQQE fan)

(1)
Without a doubt, QQQ has beat QQQE for a while, the last 8 or so years--and by a lot. I just don't think that observation has any predictive power, as it's really a wager on a statistically insignificant number of specific firms and their idiosyncratic futures. I think of the returns of QQQ as the returns of QQQE which has some statistical breadth to it, plus or minus a big random number.

(2)
Geek note, QQQ isn't cap weighted. It has its own unique weighting formula, and the difference is material.

Jim

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