The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: Trading in Retirment A/C Date:  8/6/2006  7:06 PM
Author:  ptheland Number:  52966 of 88533

Of the 98 randonly-selected 15-stock portfolios that Bernstein examined for the period 12/89-11/99, 77 beat the S&P500 return of 18.94% per annum.

You do realize that his methodology for coming to this conclusion is ... well ... crap. It is massively influenced by a survivorship bias.

He selected random 15 stock portfolios from the S&P 500 as of 11/30/99 and then looked at their returns from 12/89 - 11/99. Great. No real losers could be chosen. He eliminated all of the stocks that fell off of the S&P 500 over that 10 year period from his analysis.

So just tell me what 500 stocks will be in the S&P 500 in 2017. Then I can give you lots of portfolios that are likely to do well.

Frankly, that analysis isn't worth the electrons used to store it.


PS - The thought occurs to me that the date "11/30/99" is a typo and should be "11/30/89". However, since that piece was copyright 2000, he's had plenty of time to fix that typo. I can't be the first person to notice this problem.
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us