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Author: cameron One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75383  
Subject: Re: The Anti-Motley Fool viewpoint Date: 2/17/1998 2:32 PM
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<<Are you serious? The US economy hasn't been strong in the 20th century? Let me assure you that if you followed a DOGS strategy in the Zambia your average returns would have been quite low.>>

But how would the strategy have done compared to the Zambia market? Even if the average return is "quite low," if it beats the market, you've reached the goal of market-beating returns. Just saying that the average returns would be low doesn't say anything.

My question is, if you don't believe in the DOGS theories because the past performance doesn't prove anything, how do you choose stocks? It seems to me that most any method you might use to determine stocks with gains potential was derived by someone at some point and then tested from past data. If the back-testing indicated good results, you continue to use it. How is this different from DOGS?

cameron


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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1831 of 75383
Subject: Re: The Anti-Motley Fool viewpoint Date: 2/17/1998 5:52 PM
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Cameron,

<< But how would the strategy have done compared to the Zambia market? Even if the average return is "quite low," if it beats the market, you've reached the goal of market-beating returns. Just saying that the average returns would be low doesn't say anything.

My question is, if you don't believe in the DOGS theories because the past performance doesn't prove anything, how do you choose stocks? It seems to me that most any method you might use to determine stocks with gains potential was derived by someone at some point and then tested from past data. If the back-testing indicated good results, you continue to use it. How is this different from DOGS?>>

Well said!

I respect John's arguments from a purely scientific standpoint. I know of no stock picking theory that has infallible predictive value because the vast majority of effort that goes into these analyses is based on history. History does not predict the future, but it sure gives us some good lessons from which we can draw reasonable conclusions about that future. The Dow strategies have been shown to be reliable over time. On a relative basis they have beaten the overall market, and (as Rayvt and others have mathematically demonstrated) they have done so with surprisingly less volatility. For this Fool's lifetime, that's proof enough for this pudding. I don't see the situation changing over the next five to 20 years, and in the marketplace that's all I need.

Suffice it to say John does not believe in the Dow strategies. That's fine. I do. That's fine, too. But while he's eating beans and franks in retirement because he has to, I'll do so because I just like them. <g>

I have said over and over and over: Ya makes your choices and ya lives with the results. And that, folks, is what investing in individual stocks is all about.

Regards…..Pixy





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Author: acubens Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1834 of 75383
Subject: Re: The Anti-Motley Fool viewpoint Date: 2/17/1998 10:22 PM
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This thread has been very entertaining to follow. I started a Dogs of the Dow portfolio last month using UV2, but I do not have 100% of my money in this strategy. Just some extra cash I had sitting in a low interest rate. I have gained alot of knowledge from the
folders, discussions, and articles from these pages.
A more important issue was raised in the beginning of this discussion. At the web-site investorhome.com, the Motley Fool has been accused of "cherry picking." Two portfolio's that significantly underperformed the market and lost start up money were closed. They were called Motley Fool #1: Start date; 1993/ Start Value; $15,000/ Status; Closed, Running with the Market: Start date; 8/95/ Start Value; $50,000/ Status; Closed.
If these portfolios existed, why are they not listed along with the Fool Port., Boring Port., etc? Even if they are closed, their value affects the overall performance of the Motley Fool portfolios. Obviously the Gardner's have learned from their mistakes, as reading their books will tell you.

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Author: galtsgulch One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840 of 75383
Subject: Re: The Anti-Motley Fool viewpoint Date: 2/18/1998 10:36 AM
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<< My question is, if you don't believe in the DOGS theories because the past performance doesn't prove anything, how do you choose stocks? >>

See my eralier post in this thread.

cheers,
John Power

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Author: galtsgulch One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1845 of 75383
Subject: Re: The Anti-Motley Fool viewpoint Date: 2/18/1998 2:00 PM
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<<But how would the strategy have done compared to the Zambia market? Even if the average return is "quite low," if it beats the market, you've reached the goal of market-beating returns. >>

If you read my earlier post you will see that this observation was meant to show that the DOGS are sensitive to the overall market. I didn't think this was very controversial.

cheers,
John Power

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