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Investing/Strategies / Retirement Investing
|Subject: Re: The Anti-Motley Fool viewpoint||Date: 2/16/1998 8:44 PM|
|Author: orangeblood||Number: 1816 of 83079|
>>><<There are reasons the Dow theories work>>
As I said these are just plausibility arguments to explain events after the fact. I am claiming that DOG'ers are making a mistake in logical thinking. Let me give you an example: If I flip a coin 10 times and it comes up heads 8 out of 10 times one could argue that the coin is weighted to come up heads. But the fact that it came up heads 8 out of 10 times may also be coincidence. The point is that I wouldn't take the past performance to seriously. At best I would note the result and then form an hypothesis to test my "hunch". As a scientist in one of the so called "hard sciences" (physics) I have to keep in mind that correlation is not science, one must establish a causal relationship.<<<
Thank you very much for making my point for me! Yes, winning 8 out of 10 coin flips proves nothing. But outperforming the market over 10, 20, 30, 40, 50, 60, and 70 year periods should tell you something. (This is where the common sense comes in.)
I know you're a physicist and not a statistician, but tell me, *at what point* does any of this become statistically significant to you?
And BTW, in a post to Pixy you said the Dog theories rely on a strong economy and cherry-picking the best stocks... but the periods I've given you above take into account both weak and strong economies, and there is a long enough time horizon there to negate any "luck factor" in picking good stocks. So, you've still failed to show where there is any "danger" in this.
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