The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: westpacific who wrote (49746)	1/14/2006 5:03:45 PM
From: GraceZ	Read Replies (1) of 110194

The only thing that saved it was MASSIVE FED AND PPT injections of FIAT offshore props Survivorship bias has an enormous effect on indexes like the Nasdaq 100, indexes that include a lot of riskier, fast growing new companies. If you were to chart the Nasdaq 100 using the companies that comprised the index back in 2000 it would still be fairly low. You'd find that an enormous number of companies included in 2000 went to zero and were liquidated. The weak were merged into other stronger companies. Only the strong survive in an index and this skews the measurement upward. No worldwide interventionist conspiracy is necessary. en.wikipedia.org Survivorship bias is the tendency for failed companies to be excluded from performance studies due to the fact that they no longer exist. It often causes the results of studies to skew higher because only companies which were successful enough to survive until the end of the period are included.

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