Flawed Analysis

profiting from price fluctuations without predicting price movements, but still taking advantage of them. Without using any indicator, or whatever contraption, and nonetheless pocketing the profit

Unfortunately your entire premise consists of “prediction” and to show a small sample of survivors gives lie to the fact that the majority of stocks end up worthless over time.

To quote the DJIA is a different kettle of fish and but still predictive. You are predicting the continuance of economic growth which may (or may not) prove prescient.

I must politely state that in my opinion your entire approach to stock markets and investment is flawed. There is of course scope for polite disagreement in life and the markets and it seems to me that you approach markets from the perspective of a computer programmer rather than a realist or an investment professional.

No one can or should doubt the numbers you provide above. You have taken some numbers, applied some programming and drawn some conclusions. Unfortunately in an uncertain world your conclusions are incomplete or more probably inappropriate to apply to an infinite future.

I realise that I have been your constant critic for some years and a thorn in your flesh. But I hope that I may perhaps have served some useful purpose in curbing your enthusiasm for schemes which do not, sadly, have much basis in reality..

With respect your strategies are far from complex. They are simply naive, ill conceived and unrealistic. I do not want to upset you or insult you. That has never been my object.

I just don’t believe you think things through properly. This is demonstrated perfectly by the following statement:

Get a thousand stocks over the last 20 or 30 years and do the calculations. The formula is: nb_up_days += 1. You will find about the same numbers.

My database contains currently listed as well as delisted stocks and mutual funds. I can’t recall the exact number. 80,000 perhaps?

No one is accusing you of “lying”. Certainly not me. I am sure you have many loyal supporters out there on Wealthlab but not many of them will have much experience.

Your numbers do not “lie” – they are merely produced from naive and unrealistic assumptions.

Therefore, I am not that much concerned about stocks going bankrupt since they will fail the test to remain on my selectable list of tradable candidates long before they go down to zero.

So how does that fit in with this statement you made in your previous post:

profiting from price fluctuations without predicting price movements, but still taking advantage of them. Without using any indicator, or whatever contraption, and nonetheless pocketing the profit

And as to the following statement:

However, they don’t take an 80,000-stock universe to do so or use thousands of strategies. They don’t add the kitchen sink to the process either.

No they do not.But they probably could and should. If you insist on sampling then do so on a statistically valid basis by including listed and delisted stocks on a random basis over several draws..

You will then likely see that your following statement no longer holds:

Get a thousand stocks over the last 20 or 30 years and do the calculations. The formula is: nb_up_days += 1. You will find about the same numbers.

Unfortunately your analysis of markets does not hold water. And when you add to that your recommendation for dangerous levels of gearing it becomes readily apparent that you have not worked your analysis through. If you had you would realise that your account would be wiped out long before your goals were achieved and that in any event you would be closed down by broker margin calls.

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