The ONLY strategy that always works!

crgarcia · Feb 9, 2009

Undervalued stocks (low P/Es) of excellent companies, soon or late will go up
(altough it may takre some years, don't worry, relax at least you are receiving dividends).

The ONLY strategy that works, everything else is BS.
Is your strategy profitable after 25+ years of backtesting?

BabyDrew · Feb 9, 2009

Quote from crgarcia:

Undervalued stocks (low P/Es) of excellent companies, soon or late will go up
(altough it may takre some years, don't worry, relax at least you are receiving dividends).

The ONLY strategy that works, everything else is BS.
Is your strategy profitable after 25+ years of backtesting?

Um...any buy and hold strategy is profitable over the last 25 years. Anything you bought in the 80's was golden. Isn't that the way bubbles work?

drukes1234 · Feb 9, 2009

AIG, FRE, FNM, ABK, BSC, LEH all had very low P/E's and according to you were great buys when they were 75% off their highs.... unfortunately they're now 98% off their high's and in 25 years you will still not be in the money

Mike805 · Feb 9, 2009

Your claim is questionable (mostly BS) because of survivorship bias. The "rock solid" companies you are testing on are the ones that didn't fail.

Good luck predicting what co.'s won't fail in the next 25 years...

Strategies that "always" work have nothing to do with a company's fundamentals. They have everything to do with investor behavior.

Mike

TraDaToR · Feb 9, 2009

You must be glued to your screen with such a strategy.

drukes1234 · Feb 9, 2009

Quote from Mike805:

Your claim is questionable (mostly BS) because of survivorship bias. The "rock solid" companies you are testing on are the ones that didn't fail.

Good luck predicting what co.'s won't fail in the next 25 years...

Strategies that "always" work have nothing to do with a company's fundamentals. They have everything to do with investor behavior.

Mike

Yep, the strategy that historically has worked would be to buy an index and over 25 years you make money. However, past returns are not indicative of future results.

crgarcia · Feb 10, 2009

Quote from drukes1234:

AIG, FRE, FNM, ABK, BSC, LEH all had very low P/E's and according to you were great buys when they were 75% off their highs.... unfortunately they're now 98% off their high's and in 25 years you will still not be in the money

They weren't excellent companies.

R. Raskolnikov · Feb 10, 2009

Thanks Captain Hindsight

Quote from crgarcia:

They weren't excellent companies.

goldenarm · Feb 10, 2009

The only strategy that works is to cut your losers and let your winners run.

swtrader · Feb 10, 2009

Quote from crgarcia:

Undervalued stocks (low P/Es) of excellent companies, soon or late will go up
(altough it may takre some years, don't worry, relax at least you are receiving dividends).

The ONLY strategy that works, everything else is BS.
Is your strategy profitable after 25+ years of backtesting?

"excellent companies"

that's where you blew it

sometime 'excellent' can only be defined in hindsight

enron was an 'excellent' company too

and all strategies work in hindsight