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Author: Beans2345 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 252118  
Subject: Typical Returns & Outsourcing Date: 12/5/2012 2:54 PM
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I am new to mechanical investing and am very intrigued.

1) What are the typical returns here compared to S&P?
2) Once I pick the strategy, is it possible to outsource the execution of buying and selling?
3) What is the quickest way to get started?
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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240432 of 252118
Subject: Re: Typical Returns & Outsourcing Date: 12/5/2012 3:54 PM
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Welcome!

1) What are the typical returns here compared to S&P?

Returns are all over the map.
From among those who have stuck around here for several years,
admittedly a biased sample, expectation of beating the market by a few
points per year on average over a long time frame seem very reasonable.
This doesn't sound like a big deal, but it is.
Don't get seduced by the strategies that seem to promise 40%/year, it won't happen.
The goal should be moderate to good long term outperformance.

2) Once I pick the strategy, is it possible to outsource the execution of buying and selling?

Not a lot of posts from people who have tried this.
I tried, I failed, I do it myself. It's not hard.
But in theory there might be "investment advisors" willing to do this for you.
You have to ask yourself whether it's worth what they'll charge.
They will have to have discretionary authority on your account, which
means they have potential liability, and they will want to charge for that.

3) What is the quickest way to get started?

Good question!
The FAQ (look over at the right side of the page) is good, of course,
though getting a bit long in the tooth.

The best resource is simply a lot of reading here at the board.
Use this specific search engine http://www.datahelper.com/mi/search.phtml
Bookmark that, and never let it leave your side.
Search for the posts in a given year sorted descending by recs.
At the beginning, do that with "top only" checked to reduce the number of messages returns.

Another great way to get started is read until you have a pressing
question, the post the question. People around here are amazingly helpful.

I suspect you'll soon have the question "what's the best screen to use", which is a delicate question.
To skip the month of solid reading, I personally suggest YldEarnYear.
The gift that keeps on giving!
Go to this link and click "run" http://www.backtest.org/YLDEARNYEAR:SBcpeG0XcdyDcpeT35Xtr1yT...
It was invented in June 2003; you can see how it has done since then.
If you want to try to figure out what it's doing, this is the key to the data field abbreviations.
http://www.backtest.org/vlfields.html

Jim

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Author: cynicinvestor Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240434 of 252118
Subject: Re: Typical Returns & Outsourcing Date: 12/5/2012 4:10 PM
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Mungofitch replies in this way:

Q : "1) What are the typical returns here compared to S&P?"

A : " From among those who have stuck around here for several years,
admittedly a biased sample, expectation of beating the market by a few
points per year on average over a long time frame seem very reasonable"

***************************

That is correct. I also would like to point out that among those that have won the lottery, results average to several millons dollars per capita.

( in other words, some "samples" are so biased that should not be used for any purpose at all )

Vizcacha

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Author: mark19601962 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240437 of 252118
Subject: Re: Typical Returns & Outsourcing Date: 12/5/2012 9:50 PM
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( in other words, some "samples" are so biased that should not be used for any purpose at all )

We have the backtesters, and the fact that people here seem to be very honest, so I don't think that beating the market by a few points per year is at all unreasonable. I am also a newbie, so unfortunatley, I can't state what my results are yet.

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240443 of 252118
Subject: Re: Typical Returns & Outsourcing Date: 12/6/2012 6:35 AM
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in other words, some "samples" are so biased that should not be used for any purpose at all

I guess it's time to re-post on the SIPro Index.

Almost six years ago I introduced the idea of a SIPro index (would that be SIPI?). The general rap on MI screens is that they are volatile and are only beta screens; they go up more when the market is going up and go down more in a crash.

Well, to quote Mr. Gershwin, it ain't necessarily so.

The main issue is that our screens typically hold three or five stocks while an index has 100, 500, 1000 stocks. To level the playing field I took 20 SIPro screens and averaged their returns for each year since 1998. Since 2006 two of the screens have been discontinued (Commodity and Eastwood because the short interest field is no longer carried) so it only has 18 screens for a total of 90 stocks.

Here are the post-creation numbers:

SIPI SPY
2006 27% 15%
2007 36 5
2008 -30 -37
2009 21 26
2010 35 15
2011 5 2

In a few more weeks we'll add 2012.

DB2

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Author: sencoman One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240448 of 252118
Subject: Re: Typical Returns & Outsourcing Date: 12/6/2012 2:25 PM
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Some insight into 'typical' return of board participants can be gleaned from Todd's poll:

http://boards.fool.com/a-total-of-93-people-have-responded-t...

Important: Such a poll would have survivorship bias, and the results are probably slanted upwards; they do not include reports of people that stopped visiting this board and/or do not respond to the poll due to losses.

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Author: Beans2345 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240509 of 252118
Subject: Re: Typical Returns & Outsourcing Date: 12/10/2012 4:25 PM
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Thanks all for the thorough responses. I* will be back with more questions.

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