Designer Model/Smart Alpha/R2G are exists since March 2013.
Very hard to find model which perform every year out of around 300 models from the list.
Please, help to list models which exists for more than 2 years and performing good each 1 year period since launch.
ie.,
https://www.portfolio123.com/app/r2g/summary?id=1056197
Thanks
Kumar
It’s very easy to find outperforming models, just go to “Models” → “Designer Models” and under Multi-Sort sort for “Returns” or “Excess Returns”. If you want models that have been around for a long time, sort by “Launch Date.”
If you want a model that always outperforms, and never underperforms, well this is what every investor in the whole world wants, right?. Everyone will underperform eventually, even Buffett had several periods of underperformance.
MisterChang,
For last 4 years market did not have significant draw down, like SP500 20% draw down.
So, it is reasonable to expect all 4 years positive return models.
In stock market, more fearful and more greedy emotions, very few successful disciplined investors and willing to share their success thru designer models which outperform in out of sample.
P123 is one of the place to find those few,
My finding so far Mgerstein, Twytwy, Ralph, JudgeTrade, Olikea, recently Yuvaltaylor etc.,
Eventually, we will recognize the best designer and their skills within P123 and we will benefit from.
https://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice/up-next
Thanks
Kumar
there was also a link for seeing which stock is in which public model, i can’t find that anymore in the new version… please help
Did not surprise me that someone would think he could make my life better by limiting my choices.
Frankly, his conclusion did not surprise me a bit either. His openness surprised me a little—but I think be believed he was talking to like-minded people at his Ted Talk. Did you catch his conclusion? “… ‘Pareto improving move’, income redistribution will make everyone better off.”
As if his pseudo-intellectuallism would convince me to ask someone to limit my choices for me because it is too painful to have to do it for myself. But will he really wait for me to ask? Hmmm…when was the last time income redistribution was voluntary? I’m not the sharpest cheddar in the dairy case but maybe I am finally getting the real point of this.
For context, by “Pareto improving move” he is saying that an extra $20,000 for a billionaire does not mean much (has less utility) because of logarithmic utility of income. And someone who is poor will get greater utility from that same amount of money. Maybe instead of going to big screen TVs in each to the bathrooms in the mansion the $20,000 could go to a college education for a struggling student. On average people are better off.
I see this argument and I am in favor of some redistribution. It is not new and it is not his idea. But the idea that individuals will be happier because you are taking money from them and giving them fewer choices is new. The idea that every single person will be happier after redistribution of income is new. I have to hand it to him for making the effort on this one. How could I blame him for trying?
As an aside that we all should be aware of (if we are investing money based on backtests), many of the studies that Barry Schwartz rely on can not replicated. For example, according to the Financial Times it turns out that it really is not painful to have “too many” choices of jam at the supermarket after all: https://www.ft.com/content/9cebd444-cd9c-11de-8162-00144feabdc0#axzz2rEYLWhAO
But replicating studies is a huge problem everywhere. So what of the entirety of the literature? Seems that, if it exists, the effect may not be simple and may not always be in full effect.
A quote from Barry Schwartz himself: “….if options are organized into categories, the too-much-choice effect is mitigated or eliminated.”
Instead of forcing people to give up their money maybe he could teach them to make categories in a spreadsheet. Nah. What would be the fun in that?
-Jim
David
Jim, to quote the shrink in the TED session, and to use this in finding good models, “the secret to happiness is low expectations”.
I think that is related to Buddhist philosophy as well. Something like, unhappiness stems from unmet expectations.
And, I think that is why people switch around between investment models so much.
And why I use rolling tests. It helps set (lower) my expectations.
I do question his thesis that freedom=choice. I can see where he gets it but I am not sure about it.
If a philosopher, not shrink, had talked to this subject, they would have spoken about how to make better decisions with all the choice we have. I agree with you that less choice is bad. But making wise choices is really hard. I guess that is part of parenting and growing up. Learning to do that.
That, of course, applies to making good choices about what invest model/vehicle/asset allocation/stock, etc to use.
What is the best criteria and decision process for finding the right Designer Model so one can make a wise decision?
That question can never be answered in general.
The standard answer to this is always “it depends”.
It depends (among other things) on your risk tolerance, your financial background and assets, your age, your income, your pension plan, your ideas about “the good life”: like spending now and finance my dream or saving nesteggs for later.
And numerous others.
So, there you you have it.
Lots of choices.
And nobdy can decide except yourself.
Werner
Hi Kumar
Check out these two models which have been performing excellently out-of-sample for the last two years in each year:
Cloudvestor 8 Canada Value Plays (ex RALPH’s)
https://www.portfolio123.com/app/r2g/summary?id=1371574
37.2% p.a. since 07/21/15
Cloudvestor 8 Russell2000 Gems (ex RALPH’s)
https://www.portfolio123.com/app/r2g/summary?id=1313912
26.91% p.a. since 02/22/15
I find these ones extremely interesting:
Cloudvestor Smart & Lazy Investor
https://www.portfolio123.com/app/r2g/summary?id=1451237
Cloudvestor Exponential Movers
https://www.portfolio123.com/app/r2g/summary?id=1451193
The ultimnate answer is not simple, as I’m sure we all know. But I think we can make it a bit less difficult if we quickly and easily eliminate models we can easily see we should not be looking at. We can do this by:
Consider risk. If a model is not designed an a way that is consistent with what you want, your chances of being disappointed are probably 100%. This will be so for conservative investors who pick a too-aggressive model, for aggressive investors who pick a too-conservative model, and all in between.
Consider trading commitment. There is a lot you don;t know but one thing you do know is your wilingness and capacity to trade. This includes cost (your brokerage arrangement), time (manual? Auto? Weekly rebal? Monthly? Quarterly?), your tax situation (taxable account or one in which its ok if you would have a schedule D that rivals “War and Peace”), amount you are willing to commit to a model, etc.
The rest of the decision process is still as difficult as ever. But if you at least narrow the field as per above, your chances of making a good choice increase and even if you don’t wind up with the best popssible choice, you’re likely to feel much less pain, if any, as a result of an incorrect choice.
This is analogous to something I’ve been doing lately with modeling; focusing less on the brest of the best and more on the benefits of eliminating dumpster fires.
Small cap models are where the individual investor can beat the institutions. (At least it has been since 2000. From 1995-2000, large cap indexes and models reigned).
SPY is up 32% over the last 3 years. Here are the RTG models with:
that are up more than 32% the last 3 years in actual trading:
The other 18 “large cap” models have underperformed SPY. A .250 batting average. Good large cap models are hard to build.
On the other hand, if I change the filter to:
Less than 5% large cap
then there are 20 models (out of 47) with 3 year returns greater than 32%. That’s a batting average Ted Williams would be proud of (.426)
Of course, both batting averages are much lower than that in reality, given all the models that have been tossed aside in development and deleted after launch.
