Post #710 by elann on the Mechanical Investing board

Investment Strategies / Mechanical Investing

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Mark Boucher in his book "The Hedge Fund Edge" ... reports the results of a contest "between Mr. Timing and Mr. Selection. Mr. Timing was prescient and picked the best day of the year to buy the S&P and sold on the best possible day that year. Mr. Selection, on the other hand, bought the very best stock for the year on January 2nd and sold on the last trading day of the year."

Who do you think wins the contest?

Duh!

In any given year, the largest increase for the index from bottom to top is barely more than 50%. And in any given year there is at least one stock, and probably many more, that appreciate more than 100%.

It's hard to imagine a more contrived and meaningless "contest".

Elan

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