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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76397  
Subject: Re: Trading in Retirment A/C Date: 8/6/2006 7:06 PM
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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.

--Peter

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.
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