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Investing/Strategies / Foolish Four
|Subject: Re: Unemotional Inv||Date: 3/31/2008 9:28 AM|
|Author: rwde||Number: 40833 of 40850|
In The Unemotional Investor, Robert Sheard recommended using the Unemotional Value and the Unemotional Growth systems. He wrote the book in 1998. Where can I find a table which would show how his two systems would have done from 1998 to 2007 inclusive.
Things have evolved tremendously since Sheard developed those two screens. He has long since gone his own way, but a vibrant community of investors have continued his legacy.
They started, I believe, over on AOL, then came to the internet proper as the Foolish Workshop here at TMF.
The FW developed more, and more effective, screens as time went on. It was closely affiliated with the Foolish Four, a Dow dividend-based investing method that used a similar data-driven quantitative investing style, with a heavy reliance on backtesting.
The Gardeners have always been more comfortable with a fundamental analysis style of investing, but TMF also promoted the F4 as a method for those who didn't want to get into fundamental analysis.
The Foolish Four went by the wayside when TMF dropped it after more data came available that showed it wasn't actually as reliable as the limited data previously available had indicated. At the the same time, TMF dropped its sponsorship of the FW web section here at TMF. Those pages are still available, but no longer being updated.
The activity is now mostly on several of the message boards here at TMF - primarily the Mechanical Investing board and its still operating but much less active Foolish Workshop predecessor, along with the Benchmark Investing board and maybe one or two others.
In direct answer to your request for performance information for the UV and UG screens, the best I can do is to direct you to Jamie Gritton's backtester's results for the UG screen:
Click the Run button there and you'll get the CAGR, or Compound Annual Growth Rate, and GSD, or Geometric Standard Deviation. The CAGR you probably know. The GSD is a measure of the variability of the screen's results.
At 37, the GSD is quite high. Anything over 30 is usually undesirable. Unless mitigated by blending with suitably uncorrelated investments, such a high variability makes it too difficult to follow such a screen, no matter how unemotional one tries to be.
Look around at the http://backtest.org site, try a number of the predefined screens and maybe some blends.
Come on by the MI board http://boards.fool.com/Messages.asp?bid=100093 and see if you might like to join in. I must forewarn you that it can be a bit daunting. There's a lot of information to digest.
Here's the "current" FW/MI FAQ (quite dated now, nearly 7 years later):
And JimZipCode's intro series to MI, the most recent effort:
MI1: Intro, Math
MI2: Problems, Lingo
MI3: Screens, Switching
MI4: Options, Timing
MI5: Basics, Thinking
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