Richard1580 wrote: ↑Thu Aug 02, 2018 10:34 am
Interesting. Until I read this post I had never heard of "Hot Hands." After reading up on it, I can see the appeal. However, while the Hot Hands' CAGR is far superior to everything else when you calculate from 1999, its performance is both erratic and often anemic since then. VFINX (S&P 500) on the other hand, outperformed every other portfolio in each of the other test periods.
I think I will just stick to my S&P 500/Total Stock Market index funds.
To be fair to the person (Dan Wiener) who has the "original" (??) Hot Hands portfolio, I don't think Madsinger is following it exactly, because he doesn't subscribe to the Newsletter.
I know that at least recently, there was a mis-match, and I suspect there might have been others, but I'm not sure.
Dan Wiener has a very specific definition for the array of eligible funds to be used for selection.
I've subscribed again recently, when there was an ultra-low offer (something like $49, which I'd never seen before), so I'll try to find an update. But I'm not sure if he updates it in every monthly newsletter.
Also, it turned out in the past, as Dan Wiener noted, that the "October Hot Hands" portfolio was in fact better in terms of total performance, but it had more years where it was not the best (or some other "non-best" measure; again, I'll try to look it up).
So I'm not sure if the recent loss of performance is accurate or not.
But aside from the HH reporting, Madsinger has done a real service in faithfully posting these comparisons for a long time. It's nice to get the historical comparisons, of course, but also very informative to get the running tallies each month, and get a feel as time goes along.
Thanks again, Brad!
Note: For those who think about subscribing, there seems to be an occasional and recurring "special offer" that can be $89 or $99/yr, sometimes for one year, sometimes if for two years. There really should *not* be a need to pay the regular price if one doesn't need to "subscribe *now*" or if one can "miss" some issues between subscriptions.
(They DO refund money if one requests it, per the terms offered.)
We gained quite a bit "from the articles"
when I first started handling the investments, and a few of the recommended funds (Vanguard and non-Vanguard) have continued to do well.
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