3 ms·
Your backtest doesn't address anything that the paper covers and seems completely unrelated. It feel like you read the headline on HN and assumed you knew what
by freddie_mercury 7y ago
Your backtest doesn't address anything that the paper covers and seems completely unrelated. It feel like you read the headline on HN and assumed you knew what the paper was about.
Here's the beginning of the abstract, which only takes four or five seconds to read:
"The majority of common stocks that have appeared in the Center for Research in Security Prices (CRSP) database since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. When stated in terms of lifetime dollar wealth creation, the best-performing 4% of listed companies explain the net gain for the entire US stock market since 1926, as other stocks collectively matched Treasury bills."
What part of that does your 5 second backtest show?
- H8crilA 7y agoTouché. I did think it's about the asset class as a whole and didn't bother reading the article because it looked like something as useful as a "are we in a recession" clickbait. But that isn't surprising either, on a long enough timeline everyone's survival rate drops to zero (hence most individual stocks die, eventually). Also, stock returns are Pareto distributed, which means that a small fraction represents the majority of the gains (hence there will always be massive outperformers that dominate the space). Nothing surprising here.