Thanks for commenting Mark Lyck — I would caution you in your use of forecasting a trading…
Joe Mueller

It completely depends on the system in Question. Formula Stocks is built on sound business analysis and human fundamentals. E.g. it expects humans to be greedy, something we have always been and always will be, it expects the market to be inefficient, it expects people to make mistakes etc. When you have a system that’s built on fundamental things that simply do not change over time and always holds true. There’s no reason to believe the system would stop working. Of course if you’re talking about systems that expects oil prices to have a relation to the stock market or something that might have been true lately. YES, there’s absolutely zero guarantee that they will still hold true in 5 years. But humans will always be greedy. 1 bird in the hand will always be worth more than 2 in the bush etc.

Your second point though does have some merit to it. To beat the stock market, per definition you must be doing something different than the majority of others. But given that Formula Stocks is behind a paywall. (it’s not free) and the system isn’t public. With a system built to withstand high liquidity for the amount of people interested in quantitative investment systems, it’s highly unlikely to move the market. Even if there was a sudden shift, Formula Stocks has a hedgefund product built specifically with AUM capital in mind. Although lower returns than their Business model. It certainly still beats the average market, and still at a +90% success rate.

It’s quite the opposite of dangerous, for either long term or new investors.

If you have a 2 methods, one has historically (both in theory and long term realtime practice gotten 9/10 right on average) with a high annual return.

The other system has on average gotten 5–6 / 10 right on average with a low annual return.

Which one do you pick? If you could request any proof you could think of, that method 1’s claims are true. There’s simply no logical reason to take an approach that’s more risky, involves more work, and gives lower returns.

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