l.i.g., you have to draw the line somewhere. If you say that 19.6 is as good as twenty, then you could say, "well, OK, let's set the definition at 19%. Then if you had an 18% drop, someone could come along and say, well, 18% is as good as 19%, so really, we had a bear market, and so on. The point being, where do you stop with that process?
If you have a model which, when back-tested, appears to have the ability to forecast a bear market, using a particular definition, and if you then start tweaking the definition, not only would you be guilty of exactly the kind of hedging that you and Herb have accused Bob of, but any attempt to maintain a model would degenerate into nonsense. |
