Also, prices aren't stationary. For an equity security, you are predicting the price for a company that is compounding capital over time. You can predict the pr

Also, prices aren't stationary. For an equity security, you are predicting the price for a company that is compounding capital over time. You can predict the price for the company at one point, the relative valuation for the company (for example, against peer group) may not change in one year but that company is investing their capital at X% so you get price growth. The reason why relative valuation models are more effective is the same reason why most sports betting models use current odds as an input. Prices contain information but, in my experience, these methods aren't totally effective because they often miss important information about the company itself (big price moves happen because relative valuations are wrong). Value or quality appears to do fundamental work but is often woefully blind (for example, there are proven accounting issues with value strategies...does your average quant understand this? No. Have they ever read a set of accounts? No. They have no hope. None.) Just imo, I think quant strategies are almost totally worthless beyond liquidity provision (even a strategy like front-running news in FX...humans do this better, and I know people who are still making tons of money doing this). I think there is massive value in that mode of analysis but the people who make the most are always going to be people who know the fundamentals better (I think firms like Marshall Wace that are doing this synthesis will move ahead) because that information is often not in the price at all.