Tuesday, December 31, 2024

Former President Jimmy Carter dead at 100

Former President Jimmy Carter dead at 100: Jimmy Carter, the 39th President of the United States, who served one term, from January 1977 through January 1981, has died at 100. He was the first presidential candidate for whom I ever voted, and I will always be grateful that my vote did not hel...

Jimmy Carter: His image vs. the reality I experienced covering his 1976 campaign

Jimmy Carter: His image vs. the reality I experienced covering his 1976 campaign: As a young freelance journalist and photographer in Washington, D.C. in the mid-1970s, I covered Georgia Democrat Gov. Jimmy Carter’s successful campaign for the presidency in 1976. I was on the press bus when he campaigned in the primaries ...

Ask the Venezuelans how great an ex-president Jimmy Carter was

Ask the Venezuelans how great an ex-president Jimmy Carter was: There's a persistent truism out there that while Jimmy Carter was an execrable president, he was nevertheless a great ex-president. It's balderdash. He may have done some worthy deeds around the eradication of disease and the building o...

Wednesday, December 25, 2024

Stolen valor: Another downward revision in the Biden jobs numbers and it's a doozy

Stolen valor: Another downward revision in the Biden jobs numbers and it's a doozy: Ahead of President Trump taking office on Jan. 20, Bidenomics is still with us. Joe crowed about all the 16 million jobs he'd 'created' in his speech five days ago, patting himself on the back. Here's the White House public rela...

Friday, December 13, 2024

This is what happens when bureaucrats who have never run a business make rules for the rest of us

This is what happens when bureaucrats who have never run a business make rules for the rest of us: The Consumer Financial Protection Bureau is a bureaucracy created out of thin air by socialist Elizabeth Warren. Democrats pretend the bureau is just there to protect consumers which is B.S. Their budget is not controlled by Congress or anyone. They ...

A running list of ‘intelligence community’ screwups

A running list of ‘intelligence community’ screwups: Below are just some of the things that the Democrat intelligence community under Joe Biden has screwed up on: A Chinese spy balloon was allowed to fly over the U.S. gathering information. Large drones have been flying around the Northeast for w...

Thursday, December 12, 2024

The Cult of Credentialism

The Cult of Credentialism: I once saw a celebrated American author give a class of literature majors one of the best lessons they could learn.  He was speaking about the English language when he noticed that all of the students were busy taking notes rather than list...

Sunday, December 8, 2024

IRS' Armed Division Expands To Largest Level In A Decade

IRS' Armed Division Expands To Largest Level In A Decade: The Internal Revenue Service Criminal Investigation (IRS-CI) division, the armed enforcement wing of the IRS tasked with combating financial crimes, has expanded its workforce by nearly 11 percent, bringing staffing levels to their highest in nearly a decade and boosting the division’s conviction rate to 90 percent, according to the IRS-CI’s latest annual report. The […]

Friday, December 6, 2024

FEMA packs up from North Carolina, leaving behind a whopping 19 trailers for survivors

FEMA packs up from North Carolina, leaving behind a whopping 19 trailers for survivors: Is it that hard to deliver small trailers for survivors of a monstrous hurricane? Well, to FEMA, Joe Biden's emergency management agency it is. Here are the sorry leavings: 🚨#BREAKING: FEMA was caught on tape saying that the reaso...

Monday, December 2, 2024

Flashback: Adam Schiff said pardons in which the president is directly implicated could be an ‘obstruction of justice’

Flashback: Adam Schiff said pardons in which the president is directly implicated could be an ‘obstruction of justice’: As Adam Schiff said in 2018, we wouldn’t want a president abusing the pardon power in order to “shield himself from liability” because such circumstances could very easily amount to an “obstruct[ion of] justice.” Schiff ...

Birthright Citizenship: The 14th Amendment Does Not Apply to Illegal Aliens

Birthright Citizenship: The 14th Amendment Does Not Apply to Illegal Aliens: America is about to go to war over whether the government has the power to deport entire families of illegal aliens. That question involves “birthright citizenship”—that is, whether a child born in the U.S. to illegal alien parents ...

Birthright Citizenship: The 14th Amendment Does Not Apply to Illegal Aliens

Birthright Citizenship: The 14th Amendment Does Not Apply to Illegal Aliens: America is about to go to war over whether the government has the power to deport entire families of illegal aliens. That question involves “birthright citizenship”—that is, whether a child born in the U.S. to illegal alien parents ...

Wednesday, November 6, 2024

President Trump ‘the convicted felon’ gets to vote… thanks to a relatively new Democrat law

President Trump ‘the convicted felon’ gets to vote… thanks to a relatively new Democrat law: Glorious, glorious comeuppance, and divine schadenfreude. Mainstream media operatives at both CNN and The New York Times find themselves in a distraught state today because President Donald Trump still gets to vote in the election despite being a ...

Tuesday, November 5, 2024

Project 2025 Promotes Freedom

Project 2025 Promotes Freedom: Over the past few months, a lot of ink has been spilled and words spoken about Project 2025 and former President Donald Trump’s support for it. Almost all of what’s been written and said have been lies from biased writers and pu...

Thursday, September 12, 2024

Democrat Platform Says America Was Built on Stolen Land


thevanx@gmail.com sent you an article below via PrintFriendly.com

Democrat Platform Says America Was Built on Stolen Land

The DNC 2016 party platform began by claiming that "Democrats meet in Philadelphia with the same basic belief that animated the Continental Congress when they gathered here 240 years ago." Four years later, out went the Continental Congress and all of America. The 2020 DNC platform began with a politically fashionable 'land acknowledgement' asserting that America was an illegitimate entity...

Read More  |   Print This Page or Convert it to PDF

Wednesday, September 11, 2024

25 Lies Kamala Harris Told In Her Debate Against Trump

Here are some of the biggest falsehoods Harris told during her debate with Trump. https://thefederalist.com/2024/09/11/25-lies-kamala-harris-told-in-her-debate-against-trump/

Tuesday, September 10, 2024

Economists vs. Non-economists

https://open.substack.com/pub/arnoldkling/p/economists-vs-non-economists?utm_campaign=post&utm_medium=web&comments=true

Thursday, September 5, 2024

WSJ.com: FISA vs. Liberty

 ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

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Thursday, August 29, 2024

The fallacy that Biden’s been good for people’s retirement funds

The fallacy that Biden’s been good for people’s retirement funds: If you look at leftist political means on social media, most of what they say is abstract. Thus, they’ll preach “love” in one post while, in another, they gloat over Trump almost being assassinated or they’ll celebrate Kamala&...

Monday, August 26, 2024

The Late Susan Wojcickis Garage Reveals Judge Mehtas Lack of a Case

https://www.realclearmarkets.com/articles/2024/08/14/the_late_susan_wojcickis_garage_wrecks_google_antitrust_ruling_1051426.html

Math Confirms the Foolishness of Warming Alarmism

https://www.realclearmarkets.com/articles/2024/08/14/math_confirms_the_foolishness_of_warming_alarmism_1051222.html

August 26, 1965, Executive Order 11241

August 26, 1965, Executive Order 11241: On August 26, 1965, President Lyndon B. Johnson signed Executive Order 11241, which terminated the marriage deferment.  President Johnson’s executive order made it so that childless men who were married after August 26, 1965 would be consi...

Monday, August 19, 2024

Check out this great article on https://www.thegatewaypundit.com

Hi, I thought you might enjoy reading this article I just came across: Former NIH Head Francis Collins Confronted on Behalf of COVID Vaccine Victim Who Tells Him He and Fauci 'Deserve to be in Prison for the Rest of Your Lives' (Video)

This is the link: https://www.thegatewaypundit.com/2024/08/former-nih-head-francis-collins-confronted-behalf-covid/
Want to Build an Elevator

Instead of targeting grocery stores, Comrade Kamala should go after the obvious price-gouging entities

Instead of targeting grocery stores, Comrade Kamala should go after the obvious price-gouging entities: Instead of targeting grocery stores, which operate on a thin 2% net profit margin, Comrade Kamala should go after the obvious price-gouging entities, and the ones that clearly contribute to the high inflation. The first target should be colleges a...

Maybe we should examine how well Democrats controlled health care prices before we allow Kamala to destroy our country

Maybe we should examine how well Democrats controlled health care prices before we allow Kamala to destroy our country: Obamacare is a great example of how successful Democrats are when they pass laws that they falsely told the public would reduce health insurance prices by $2,500 per family.  The Affordable Care Act of 2010 was a 2,000-page monstrosity with t...

Nightmare in Iowa: Three sequential wind turbine disasters leave millions of dollars in damages for one local farm family

Nightmare in Iowa: Three sequential wind turbine disasters leave millions of dollars in damages for one local farm family: The environmental and economic impact of one downed turbine cannot be understated, but one Iowa farm is reeling from the destruction caused by three downed turbines, in a span of less than 18 months. Here are the details, from a report published b...

Saturday, July 13, 2024

15 Lies Biden Told During His ‘Big Boy’ Press Conference

Joe Biden spewed some of the most outrageous mistruths of his presidency (so far) during his "big boy" press conference. https://thefederalist.com/2024/07/12/15-lies-biden-told-during-his-big-boy-press-conference/

Friday, July 12, 2024

Woodrow Wilson Was Even Worse Than You Think

Check out this article on TPM: https://talkingpointsmemo.com/cafe/woodrow-wilson-was-even-worse-than-you-think

[Shared Post] A respectful response to never-Trump Republicans

https://theaspenbeat.com/2024/07/11/a-respectful-response-to-never-trump-republicans/
https://www.frontpagemag.com/a-plot-to-stop-trump-in-2016-may-lose-dems-the-white-house/

Summer reruns: Intel officials wheel out the old 'Russia, Russia, Russia' canards about Russia influencing the election for Trump

Summer reruns: Intel officials wheel out the old 'Russia, Russia, Russia' canards about Russia influencing the election for Trump: Summer rerun season has begun, so we shouldn't be surprised to see the deep-state intelligence officials back, attempting to scare us out of voting for President Trump, because 'the Russians are coming, the Russians are coming.' For them,...

The Ninth Circuit shoots down COVID vaccine

The Ninth Circuit shoots down COVID vaccine: The COVID shot was put on trial in the United States Court of Appeals for the Ninth Circuit, and coming from California the result might surprise you.  Three of four judges agree it was never a “traditional vaccine” and therefore cou...

Sunday, July 7, 2024

Friday, July 5, 2024

Wednesday, July 3, 2024

What exactly are Biden’s achievements in his first three-and-a-half years?

What exactly are Biden’s achievements in his first three-and-a-half years?: In the wake of the catastrophic debate last week, Bill Clinton, most of the media, and other Democrats have been claiming that although Joe Biden had a rough night, he’s had an extremely successful presidency––basically the public i...

Recalling segregationist Biden

Recalling segregationist Biden: In 2013, NBC reported on a BBC Oprah Winfrey interview in which she shared her prescription for eliminating skin-color acrimony.

Tuesday, July 2, 2024

WSJ.com: The Constitution Protects ‘Fake Electors’

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The Wall Street Journal.

TROJAN HORSE: North Dakota Gov. Doug Burgum’s History of Selling Out to China, Kowtowing to Bill Gates, Supporting Transgenderism, Hating Trump is Revealed

https://bigleaguepolitics.com/trojan-horse-north-dakota-gov-doug-burgums-history-of-selling-out-to-china-kowtowing-to-bill-gates-supporting-transgenderism-hating-trump-is-revealed/

Friday, June 28, 2024

Check out this great article on https://www.thegatewaypundit.com

Hi, I thought you might enjoy reading this article I just came across: Trump Campaign Fact-Checks Biden in Real Time — You've Got to See This! (VIDEO)

This is the link: https://www.thegatewaypundit.com/2024/06/trump-campaign-fact-checks-biden-real-time-here/

Top virologist says long covid is real – and it’s caused by the vaccine

https://www.conservativewoman.co.uk/top-virologist-says-long-covid-is-real-and-its-caused-by-the-vaccine/

Thursday, June 27, 2024

About Those Economists Terrified of a New Trump Term

About Those Economists Terrified of a New Trump Term: Recently, sixteen Nobel Prize–winning economists released a letter saying that if Trump wins the election, his policies will cause rampant inflation.  Here are portions of the letter, from Reuters: While each of us has different ...

Whatever you do, don't take stock advice from these guys

Whatever you do, don't take stock advice from these guys: Economist Joe Stiglitz, who's famous for his history of economic failures throughout the third world, has come up with a brainchild of an idea for Getting Trump: Assemble a group of fellow Nobel economists to say that Trump will destroy the world...

Wednesday, June 26, 2024

Whatever you do, don't take stock advice from these people

Whatever you do, don't take stock advice from these people: Economist Joe Stiglitz, who's famous for his history of economic failures throughout the third world, has come up with a brainchild of an idea for Getting Trump: Assemble a group of fellow Nobel economists to say that Trump will destroy the world...

Wednesday, June 19, 2024

Why do people think Cleopatra was black?

Why do people think Cleopatra was black?: In the trailer for the disastrous Netflix documentary Queen Cleopatra, classics professor Shelley Haley states, “I remember my grandmother saying to me, ‘I don’t care what they teach you in school.  Cleopatra was black.&rs...

Sunday, June 16, 2024

Hugo Black and Democrat Racism

Hugo Black and Democrat Racism: On October 20, 1921 a Methodist minister Rev. Edwin R. Stephenson was acquitted of killing Catholic priest Rev. James E. Coyle in Birmingham, Alabama. The rather sensational trial centered upon the idea that the priest committed a heinous social crim...

Thursday, June 13, 2024

Sorry, Nancy, Trump had no role in inciting the J6 riot

Sorry, Nancy, Trump had no role in inciting the J6 riot: “The president of the United States, the former president and his toadies, do not want to face the facts,” said an embarrassed Nancy Pelosi after a video surfaced of her saying, “We take responsibility” for the breakdown of or...

Sunday, June 2, 2024

The Wall Street Journal Digital Replica Article

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Saturday, June 1, 2024

THE INTELLIGENT INVESTOR |

When Past Performance Doesn't Even Predict Past Performance

Wall Street likes to tout returns it didn't actually produce. You need to ask some important follow-up questions.

This past week, the Dow Jones Industrial Average, born on May 26, 1896, turned 128 years old. Let's pour the Dow a drink from the fountain of youth and see what happens.

I'll give you a hint. The lesson here isn't only about markets, but also about marketing—in particular, what's called backtesting, a statistical dirty trick that's central to Wall Street's marketing playbook.

And we can use the Dow, which this year has been drastically underperforming its younger cousin, the S& P 500, to help explain how the pros try to pull the wool over your eyes.

Consider the way the indexes are constructed. The Dow is priceweighted: The higher a company's share price, the more it contributes. Stocks in the S& P 500, by contrast, are weighted by their total float-adjusted market value: share price multiplied by the number of shares that trade publicly. (The Dow, originally owned by Dow Jones, publisher of The Wall Street Journal, is now owned by S& P Dow Jones Indices, but two Journal editors sit on the index committee.)

So Boeing, for instance, is 2.9% of the Dow. That puts it barely behind Apple at 3.3%—because Boeing's $172 share price is close to Apple's $190. That's why Apple doesn't have a huge impact on the Dow.

But Apple's adjusted market value, $2.76 trillion, is 28 times greater than Boeing's $98 billion. This makes it far more meaningful to the S& P 500.

Add up the share prices of the Dow's 30 stocks, and you get something like $5,850. A new stock at $1,000 a share would constitute 17% of the basket—single-handedly unbalancing the entire benchmark.

That's what Howard Silverblatt, senior index analyst at S& P Dow Jones Indices, calls "1896 mathematics." It effectively precludes the Dow from adding such stocks as Eli Lilly (recent price: $815, up 40% year-to-date) or Netflix ($648, +33%).

All this got me thinking: How would a fantasy Dow consisting of the 30 highest-priced stocks have performed?

Let's call it the Supersized Dow. Out with Intel (share price: $30), Verizon Communications ($40) and Cisco ($46). In with NVR ($7,455), Booking Holdings ($3,755) and 28 other stocks with supersized prices, including Lilly, Netflix and Nvidia.

Over the past 10 years, this Supersized Dow would have returned an average of 30.2% annually, versus 11.4% for the real-world Dow and 12.8% for the S& P 500, according to John Jacques of AJOVista, an investment firm based in Boston.

A $10,000 investment would have mushroomed to almost $140,000 in the Supersized Dow— but to less than $34,000 in the S& P 500.

What's the catch? Why can't you pulverize the market just by buying the stocks with the highest share prices?

Because of backtesting. The Supersized Dow would have outperformed only if, at the beginning of the period, you bought the stocks that happened to have the highest share prices at the end of the period— something no one could possibly predict.

If, 10 years ago, you had bought the stocks with the highest share prices then, you'd have underperformed the S& P 500 by an average of 1.3 percentage points annually.

That assumes you adjusted the portfolio each Jan. 1 so it held the 30 highest-priced stocks as of that date—as would be logical if you tried this in real time. You also had to trade for free, reinvest all dividends and pay no taxes.

By backtesting—applying hindsight to past data and pretending that a hypothetical portfolio had been run that way all along—financial marketers can make outperformance look ridiculously easy.

Take the five target-date funds run by Brandywine Asset Management of Thornton, Pa. These funds seek greater risk when savers are young, scaling back as investors approach or exceed retirement age.

Brandywine's funds use put options, which go up when stocks go down, to try mitigating losses in a market crash. In theory, that can provide an edge.

If you'd invested $10,000 in January 2013, you'd have had $23,091 in Brandywine Target Retirement at the end of March 2024—but only $16,064 in its average competitor, according to the firm.

The only trouble is, you couldn't have invested in the fund in January 2013, because it didn't exist. That track record is backtested and largely hypothetical.

The fund didn't begin operating until October 2023. The past returns show how the fund would have performed if it had existed ever since January 2013, partly based on other accounts Brandy--wine ran at the time.

From July 2018 until May 2020 and again in March and April 2023, the firm didn't have actual

image

results from the strategy, so those periods are simulated, says Brandywine's chief executive, Michael Dever.

"If you're managing money, the only thing that matters is accuracy," says Dever. "We think we've come up with a very accurate representation of what we expect to be able to achieve performancewise."

Since its launch in October, the fund has outperformed its benchmark by 2 percentage points with less fluctuation, according to Brandywine.

"So far it's been doing exactly what the back performance says it should," says Dever. "We'll know for sure in another 10 years."

The Brandywine funds are only the tip of the backtesting iceberg.

Asset managers often roll out exchange-traded funds based on such factors as "liquidity" or "revenue" that appear to have worked in the past, but flop in the real world.

Insurance companies have sold billions of dollars of annuities, universal life and other products linked to customized indexes with high past "returns" that soon fade.

Of course, you can't completely ignore the past when you project the future. To protect yourself against backtests that foretell nothing, ask questions like these: If this idea is so great, why weren't these guys using it at the beginning of the period instead of only at the end? Why wasn't everybody using it?

How long has the strategy actually been used, and with how much money? Has it been tracked over even longer periods than reported in the backtested data? How many other strategies were backtested but abandoned? Do the past numbers include trading costs?

If the answers don't make sense, don't invest.



This site provides a digital replica of the print newspaper and is intended for the personal use of our members. For commercial reproduction or distribution of Dow Jones printed content, contact: Dow Jones Reprints & Licensing at (800) 843-0008 or visit djreprints.com.

Copyright 2017 Dow Jones & Company, Inc. All Rights Reserved.

The Wall Street Journal Digital Replica Article

thevanx@gmail.com sent you this article.


Comment:


Saturday, June 1, 2024

THE INTELLIGENT INVESTOR |

When Past Performance Doesn't Even Predict Past Performance

Wall Street likes to tout returns it didn't actually produce. You need to ask some important follow-up questions.

This past week, the Dow Jones Industrial Average, born on May 26, 1896, turned 128 years old. Let's pour the Dow a drink from the fountain of youth and see what happens.

I'll give you a hint. The lesson here isn't only about markets, but also about marketing—in particular, what's called backtesting, a statistical dirty trick that's central to Wall Street's marketing playbook.

And we can use the Dow, which this year has been drastically underperforming its younger cousin, the S& P 500, to help explain how the pros try to pull the wool over your eyes.

Consider the way the indexes are constructed. The Dow is priceweighted: The higher a company's share price, the more it contributes. Stocks in the S& P 500, by contrast, are weighted by their total float-adjusted market value: share price multiplied by the number of shares that trade publicly. (The Dow, originally owned by Dow Jones, publisher of The Wall Street Journal, is now owned by S& P Dow Jones Indices, but two Journal editors sit on the index committee.)

So Boeing, for instance, is 2.9% of the Dow. That puts it barely behind Apple at 3.3%—because Boeing's $172 share price is close to Apple's $190. That's why Apple doesn't have a huge impact on the Dow.

But Apple's adjusted market value, $2.76 trillion, is 28 times greater than Boeing's $98 billion. This makes it far more meaningful to the S& P 500.

Add up the share prices of the Dow's 30 stocks, and you get something like $5,850. A new stock at $1,000 a share would constitute 17% of the basket—single-handedly unbalancing the entire benchmark.

That's what Howard Silverblatt, senior index analyst at S& P Dow Jones Indices, calls "1896 mathematics." It effectively precludes the Dow from adding such stocks as Eli Lilly (recent price: $815, up 40% year-to-date) or Netflix ($648, +33%).

All this got me thinking: How would a fantasy Dow consisting of the 30 highest-priced stocks have performed?

Let's call it the Supersized Dow. Out with Intel (share price: $30), Verizon Communications ($40) and Cisco ($46). In with NVR ($7,455), Booking Holdings ($3,755) and 28 other stocks with supersized prices, including Lilly, Netflix and Nvidia.

Over the past 10 years, this Supersized Dow would have returned an average of 30.2% annually, versus 11.4% for the real-world Dow and 12.8% for the S& P 500, according to John Jacques of AJOVista, an investment firm based in Boston.

A $10,000 investment would have mushroomed to almost $140,000 in the Supersized Dow— but to less than $34,000 in the S& P 500.

What's the catch? Why can't you pulverize the market just by buying the stocks with the highest share prices?

Because of backtesting. The Supersized Dow would have outperformed only if, at the beginning of the period, you bought the stocks that happened to have the highest share prices at the end of the period— something no one could possibly predict.

If, 10 years ago, you had bought the stocks with the highest share prices then, you'd have underperformed the S& P 500 by an average of 1.3 percentage points annually.

That assumes you adjusted the portfolio each Jan. 1 so it held the 30 highest-priced stocks as of that date—as would be logical if you tried this in real time. You also had to trade for free, reinvest all dividends and pay no taxes.

By backtesting—applying hindsight to past data and pretending that a hypothetical portfolio had been run that way all along—financial marketers can make outperformance look ridiculously easy.

Take the five target-date funds run by Brandywine Asset Management of Thornton, Pa. These funds seek greater risk when savers are young, scaling back as investors approach or exceed retirement age.

Brandywine's funds use put options, which go up when stocks go down, to try mitigating losses in a market crash. In theory, that can provide an edge.

If you'd invested $10,000 in January 2013, you'd have had $23,091 in Brandywine Target Retirement at the end of March 2024—but only $16,064 in its average competitor, according to the firm.

The only trouble is, you couldn't have invested in the fund in January 2013, because it didn't exist. That track record is backtested and largely hypothetical.

The fund didn't begin operating until October 2023. The past returns show how the fund would have performed if it had existed ever since January 2013, partly based on other accounts Brandy--wine ran at the time.

From July 2018 until May 2020 and again in March and April 2023, the firm didn't have actual

image

results from the strategy, so those periods are simulated, says Brandywine's chief executive, Michael Dever.

"If you're managing money, the only thing that matters is accuracy," says Dever. "We think we've come up with a very accurate representation of what we expect to be able to achieve performancewise."

Since its launch in October, the fund has outperformed its benchmark by 2 percentage points with less fluctuation, according to Brandywine.

"So far it's been doing exactly what the back performance says it should," says Dever. "We'll know for sure in another 10 years."

The Brandywine funds are only the tip of the backtesting iceberg.

Asset managers often roll out exchange-traded funds based on such factors as "liquidity" or "revenue" that appear to have worked in the past, but flop in the real world.

Insurance companies have sold billions of dollars of annuities, universal life and other products linked to customized indexes with high past "returns" that soon fade.

Of course, you can't completely ignore the past when you project the future. To protect yourself against backtests that foretell nothing, ask questions like these: If this idea is so great, why weren't these guys using it at the beginning of the period instead of only at the end? Why wasn't everybody using it?

How long has the strategy actually been used, and with how much money? Has it been tracked over even longer periods than reported in the backtested data? How many other strategies were backtested but abandoned? Do the past numbers include trading costs?

If the answers don't make sense, don't invest.



This site provides a digital replica of the print newspaper and is intended for the personal use of our members. For commercial reproduction or distribution of Dow Jones printed content, contact: Dow Jones Reprints & Licensing at (800) 843-0008 or visit djreprints.com.

Copyright 2017 Dow Jones & Company, Inc. All Rights Reserved.

Friday, May 31, 2024

Felon? Trump is in good company

Felon? Trump is in good company: Up until now, Democrats have loved felons. The advent of Soros district attorneys and the criminal justice

Criminal Convictions and the Presidency

Criminal Convictions and the Presidency: On Thursday May 30, a New York court led by Judge Juan Merchan convicted a U.S. President of 34 felony counts. Trump was not the first President to be arrested -- that honor belongs to Ulysses S. Grant when he was arrested in 1872 by a black police o...

Sunday, May 26, 2024

The existential horror of Sonia Sotomayor’s life on a conservative court

The existential horror of Sonia Sotomayor’s life on a conservative court: It’s tough being a wise Latina on the United States Supreme Court, especially when you must share your position with people who believe that their job is to interpret the Constitution and laws as written, not as you wish they were. That was Sot...

Obama never kept his word on warrantless wiretaps

Obama never kept his word on warrantless wiretaps: Literally less than 72 hours after being sworn in in January 2009, Barack Obama was in federal court arguing he had the right to spy on us.  Did you know that?  Perhaps you did and you forgot. Seemed a worthwhile thing to bring up in ...

Punked

Punked: This week, a lot of people and institutions got “punked,” that is, humiliated, by their own actions. Of course, the eternal punkees, as Hussein Aboubakar so brilliantly notes, are those who bought the Nakba myth by which Arab rulers ...

Wednesday, May 22, 2024

The Wall Street Journal Digital Replica Article

thevanx@gmail.com sent you this article.


Comment:


Wednesday, May 22, 2024

You Say 'Trickle Down' as if It's a Bad Thing

President Biden in his State of the Union ad --dress encouraged Americans to imagine a future in which "the days of trickledown economics are over" and the economy is built "from the middle out and the bottom up." That expression, "middle-out" economics, has bounced around Democratic politics for at least a decade. But how would it work? No one says.

Politicians may scorn the trickle-down effect, but it is responsible for Americans' economic well-being. Even some prominent 20th-century liberal economists, including Paul Samuelson and Alfred Kahn, agreed that the innovation and investment that lead to capital formation are crucial to economic growth. Kahn once wrote: "The most powerful engine of productivity advance is technological progress, generated in large measure by expenditures on research and development and embodied in improved capital goods and managerial techniques." That process confers benefits on everyone, he added, "precisely by trickling down."

When employees use better

equipment and have better managers, they become more productive. This makes them more valuable to their companies and stirs competition in the labor market, causing their real incomes to rise.

Sen. Elizabeth Warren (D., Mass.) sees the world differently. During her 2020 presidential campaign, she said the wealth tax she wanted to impose on billionaires would have no important cost to society. In her view, the tax would be reserved for "the diamonds, the yachts and the Rembrandts."

Ms. Warren ignored an important point. It's the superrich who have the greatest ability to save and invest in businesses. For his 2019 book, "The Billion Dollar Secret," entrepreneur Rafael Badziag interviewed 21 self-made billionaires. He found that they generally derived more pleasure from investing in technologies to create new and improved products—a benefit to everyone—than from spending on personal luxuries.

A good example is the smartphone. Wealthy Americans were among the first buyers of and investors in the product when it was a new technology. In time, costs dropped and smartphones became ubiquitous.

Lower taxes for the rich spur investment, which is good for people of all classes.

Politicians and the press mislead voters and readers when they claim that tax cuts for the rich don't benefit other economic classes. We all gain from new, improved products made possible by innovative startups funded by the wealthy. Excessive taxation, doubtless a feature of a "middle-out" plan, could deplete the funds that entrepreneurs use to start and sustain useful ventures.

Americans shouldn't worry so much about wealth distribution. Instead, we should be grateful for how the wealthy enable entrepreneurial ideas to come to life, allowing everyone to prosper.

Mr. Rhoads is a professor emeritus of politics at the University of Virginia.



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Sunday, May 19, 2024

Bidenflation clocks in at 19.1% since Joe Biden took office

Bidenflation clocks in at 19.1% since Joe Biden took office: Want more inflation? Here's how we get more inflation, according to TIPP, which found that Bidenflation went up yet again, dating from the day Joe Biden took office. The dark reality of Bidenomics is 19.2% inflation under the President&rs...

Friday, May 17, 2024

WSJ.com: A Hunter Biden Debate, Finally

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