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"If you take more risk you get more reward - this is true based on their 150 year dataset and true across countries." Sounds as if they fell prey to survivor b
by bubblewrap 7y ago
"If you take more risk you get more reward - this is true based on their 150 year dataset and true across countries."
Sounds as if they fell prey to survivor bias, neglecting to account for the people and companies who went bankrupt.
- skyleriberg 7y agoThey address survivorship bias on pages 17 and 18. Based on the methods they used, I don't think they fell prey to it. If there is something lacking in their work there, I would love to know.
- bubblewrap 7y agoThat seems to only address the stock market, and it is not obvious to me why an all share index would be immune to it. What happens if a company goes bankrupt? I think they just replace it in the index? So at least people who only invest in all shares indices would have done well?