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Ron Rowland's Invest With An Edge: Market Leadership Strategy: 4/1/19
For the heck of it, I took the year by year performance data from this strategy and broke it into 2 segments, 1998-2007 and 2008-4/30/17 (that's where the data ends). The system seems to have 2 different results. Market Edge '98-'07 returned 16.7% versus 7.2% for the S&P 500. Pretty darn good. But results for 2008-2017, Market Edge 8.97% versus 8.94% for S&P. Almost a a dead-heat.
Wonder why the system worked so well from 1998-2007 but didn't from 2008-2017?
For a good number of years I have referenced Mr. Rowland's Leadership Strategy to see what he is favoring and also to see what might be out of favor within the strategy thus making it a good contrarian play.
Currently, money market has moved upward over the past few weeks while scv and micro caps are at the bottom rungs of the strategy. I've been thinking of buying a little in my small mid cap sleeve as a contrarian position since they are the out of favor styles in the strategy. An example of this follows. A samll cap fund (MMEAX) that I watch that also holds a good reprenentation of micro caps was up last week by +3.67%. For those that might be interested I have linked its Morningstar fund report below.
I have found that if I wait for a style to green light then a good bit of the gain has already been achieved. This might be why the strategy has not outperformed for the 2008-2017 period as much as it did in the first period of your study since computerized trading has now become more common place with big money. I'm thinking that big money might be out playing the strategy and the gains that use to be made with the strategy are simply thinner today. I'm also thinking that the high frquency crowd has made stock market gains thinner for the retail investor as these guys skim off some of the trading profits that would have otherwise been left.
I feel it would be of good interest to learn Mr. Rowland's thoughts; and, I have made contact with his office requesting one.
Comments
Wonder why the system worked so well from 1998-2007 but didn't from 2008-2017?
For a good number of years I have referenced Mr. Rowland's Leadership Strategy to see what he is favoring and also to see what might be out of favor within the strategy thus making it a good contrarian play.
Currently, money market has moved upward over the past few weeks while scv and micro caps are at the bottom rungs of the strategy. I've been thinking of buying a little in my small mid cap sleeve as a contrarian position since they are the out of favor styles in the strategy. An example of this follows. A samll cap fund (MMEAX) that I watch that also holds a good reprenentation of micro caps was up last week by +3.67%. For those that might be interested I have linked its Morningstar fund report below.
https://www.morningstar.com/funds/XNAS/MMEAX/quote.html
I have found that if I wait for a style to green light then a good bit of the gain has already been achieved. This might be why the strategy has not outperformed for the 2008-2017 period as much as it did in the first period of your study since computerized trading has now become more common place with big money. I'm thinking that big money might be out playing the strategy and the gains that use to be made with the strategy are simply thinner today. I'm also thinking that the high frquency crowd has made stock market gains thinner for the retail investor as these guys skim off some of the trading profits that would have otherwise been left.
I feel it would be of good interest to learn Mr. Rowland's thoughts; and, I have made contact with his office requesting one.
Old_Skeet