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A cross-post from the Retire Early Home Page board:

In case anyone missed it today, Ann Coleman's post

http://www.fool.com/ddow/2000/ddow001214.htm

was a bombshell for value-style mechanical investors in the Dow. It also pretty much
seemed to announce the end of the the Motley Fool's support for the mechanical
investing strategy of the Foolish Four (based on Dow stocks with low price and a high
yield).

Too bad. It was nice to have a strategy that yielded significantly more than the market
overall, but didn't take a lot of mental gymnastics to invest in. The recent conclusion
seems to be the result of some heavy-duty database analysis of late. Still, mechanical
investing probably should be at least a part of everyone's portfolio--at least in some
form. What we are left with now seems to be index funds or some of the many forms of
Spiders. To tell the truth, I never really invested in the F4 blindly, but also "peeked" at
the underlying fundamentals whenever investing in them--a policy that paid off pretty well
for me until this last year or so--Goodyear and Sears were big hits.

To give Ann credit, in her articles she is now concentrating on meaningful portfolio
diversification and the blending of a number of other mechanical investment strategies,
complete with the prerequisite statistical analysis. Still pretty interesting reading, I think.
Nevertheless, the the world of mechanical investing has certainly become noticeably less
less certain than it was a day ago.

Any thoughts from the retired mechanical investors out there?

-- John
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