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Vash Patel's  Instablog

Vash Patel
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I'm a recent graduate of biotechnology from Penn State. I study stocks and options in my free time. I initially started researching the market and how to invest during my freshman year at Penn State to see if it was possible to pay for school by investing. Researching one thing lead to learning... More
My company:
Axis Org
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  • Vash Patel
    , contributor
    Comments (141) | Send Message
     
    Author’s reply » The totals for Div Stocks and SPY at the bottom of the data set are based on an initial investment of $91,000 ($1,000 per stock).
    14 Feb 2013, 01:53 AM Reply Like
  • David Fish
    , contributor
    Comments (7958) | Send Message
     
    "As it turns out, a full 25% of the companies underperformed"

     

    Vash,
    I'm not sure, but you seem to be suggesting that this is a big (negative) surprise. But the converse is that 75% outperformed the S&P, which sounds like a pretty good success rate! Also consider:
    1. The S&P itself includes/included many of these companies, so does the result simply say that non-dividend superstars were a drag on the S&P? (and isn't that to be expected?)
    2. Going back 20 years, these companies would simply have had streaks of 5 or more years of increases...so they may not have even qualified as "superstars" at the time.

     

    Not trying to knock your results...just wondering about the conclusion here.
    19 Feb 2013, 03:55 PM Reply Like
  • Vash Patel
    , contributor
    Comments (141) | Send Message
     
    Author’s reply » David,

     

    No problem and I appreciate you bringing to light that a lot of these are part of the S&P, that had not dawned on me (what a blatant error on my part). Anyway, my goal with this (and the reason for posting to instablog rather than as an SA article) was just to see if others could extend the research. I did not want to draw any conclusions from the very basic research I did on my own. I hope that clarifies my stance.
    19 Feb 2013, 07:14 PM Reply Like
  • David Fish
    , contributor
    Comments (7958) | Send Message
     
    No problem...just pointing out some pitfalls. Of course, any study of this type is likely to be pilloried for its "survivorship bias," among other criticisms. I wish the best of luck to anyone attempting such a study.
    20 Feb 2013, 12:27 AM Reply Like
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