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Author: Rayvt Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 253523  
Subject: Re: Does this stuff work ? Date: 2/25/2013 11:00 AM
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Alicia, you still don't get it.
You are so emotionally committed to your strategy that you refuse to see any critique or criticism of it. You are so blinded by the emotional committment that you see average annual returns in the 50% range and don't ask yourself if that even passes the smell test.

“Fools try to prove that they are right. Wise men try to find when they are wrong.”
Watts, Dickson G. (1965). Speculation as a Fine Art and Thoughts on Life


Finally, you might be interested to consider the results from my system modelled on the UK FTSE 100 constituents dataset over the 10 years to date. It uses two independent functions for detecting target buys and applies the STB process I have been describing.

Zeelotes did more than "provide [correct] GM data 2 Jan 2008 - 1 June 2009."
What he did was show that you were completely unaware of basic facts about handling historical data. That you were not only making huge mistakes, but were unaware that this was an arena where one has to take great pains to avoid using bad data.

So you corrected that one mistake, and then changed the tuning parameters so that they fit the data. This is probably the #1 most common error in backtesting. Google "data snooping".

Aside from problems with the stock-picking part of your overall strategy, the "sell-to-buy" concept is fundamentally flawed. Selling your best winning stock instead of a losing stock is KNOWN to be a bad strategy. It's also well-known that naive and newbies do just that, because it is emotionally appealing. You have spent zero time discussing why it is a successful rule in *this* strategy when it is known to be a *failure* in toto.

Finally, I'll bow out with another quote:
"How do you explain to people who just don't get it that the problem is they just don't get it?"
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