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> + The research was based on using criteria to select stocks for buy
> and hold with a yearly reevaluation.
> + He back tested from 1950 - 1994
And there you have it. His "systems" are optimized on 44 trades (1
trade/year for 44 years). That is exactly the point MB was trying to
make. 44 trades isn't enough data to draw any conclusions about the
worth of any particular strategy.
That said, I haven't read O'Shaughnessy's book. I lost all interest in
his methods when he was on CNBC tooting how the "Dogs of the Dow"
strategy had outperformed buying and holding the Dow by something like a
whopping 2% per year. (just making up numbers here but it was something
like buy-and-hold -> 12% and dow-dogs -> 14%) Of course, he failed to
mention that his strategy would have you paying capital gains taxes
every year which would probably eat up your 2% plus a whole bunch more.
--
Dennis
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