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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (48921)	11/14/2001 7:27:16 PM
From: Pirah Naman	Read Replies (2) \| Respond to of 54805

an important implication of their findings is that indexing, which reduces such costs, is an effective approach for targeting illiquid classes. there are all types of low-cost indexes available today targeting myriad asset classes. small cap is not the same as microcap. Indexing does not work for illiquid classes Why else would so many point out that these are areas where one could beat an index? Indexing will not reduce the cost effects for an illiquid class, as it creates a greater order imbalance. Perhaps you are confusing the distribution of such costs among the index investors as being an actual reduction in those costs? And dig deeper - the big differential F&F found was for microcaps. As for the low cost funds - show us the record of any that have attempted to emulate the F&F study in practice. i thought people here believed gorilla gaming works. usually, if something can be said empirically to work, then one could theoretically design a test to prove it. That wasn't what you asked. You asked for academic, statistically significant studies. GGing does work. It is an analytic method for selecting business winners in a certain sector. Can you cite any evidence that it fails in this regard; i.e., can you name a situation where the method identified a business winner and yet one of that company's competitors actually became the business winner? - Pirah