"The Nifty Fifty" - yesterday and today

[cameronfen]

I think "highly addictive" had more to do with the long term performance.

 

Agreed. Probably the best scenario involves selling addictive products that kill slowly or pills that stabilize chronic diseases without curing them.  ::)

Did you know that Coca-Cola used to contain cocaine? The ingredient has been substituted with happiness. :)

 

+1 for the happiness bit.  I once had a romantic interest of mine tell me very early on, that she got over her boyfriend "through her friends and lots of cocaine".  I don't usually run in that crowd so I thought it was a pretty amusing statement. 

[Hielko]

I think Jurgis is taking issue with your return number, not whether or not value outperforms over time.

 

15% over time is reee - donk - you - lous and should not be expected of any mechanical process.

There are plenty of simple mechanical strategies that have provided those returns in the past (think stuff like simply buying low P/B, low P/E and/or momentum stocks). Whether or not these returns can be expected in the future is a different discussion. I'm not so sure of that. Those inefficiencies might have been competed away, and secondly, future expected stock returns are in the current interest rate environment probably lower than the historical realized average of ~10%. But still, maybe those returns are still there, precisely because (almost) no-one believes following such a strategy is a smart idea (but with all the factor ETF's popping up everywhere I doubt that, and the opposite might be true...)