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Investing/Strategies / Mechanical Investing
|Subject: Re: Is the Stock Market Cheap? (Dough Short)||Date: 9/7/2013 10:11 AM|
|Author: Rayvt||Number: 245218 of 264135|
I used to have a long list of market timing methods and web sites. The most remarkable thing is that virtually all the ones that had great backtests failed sooner or later and are no longer followed.
The problem with them is that they are almost always treating market timing as a method to generate profits.
"The benefit of long-term crossover [timing] strategies has never been generating returns; it has been improving risk-adjusted returns and managing drawdowns."
That's also the thrust of all the articles you read with titles like "Market Timing Does Not Work."
So of course they failed and became abandoned. Most followers were like most unsuccessful investors -- they were looking for the pot of gold, not just an edge. That's the same as Las Vegas. Gamblers come to get a jackpot (and leave broke) but the casinos just grind away at their statistical 5% edge (and get rich).
Plus, they abandoned the strategy the moment it hit an inevitable rough patch.
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