Ellis,

You are right. There is no way to hold variables constant. That would be a real trick.

Lowell

The benchmark is hardly the issue. My point is not that I can’t measure my portfolio’s performance against a benchmark. It’s that you can’t find a universe of portfolios in which there are adequate variables to hold constant so as to measure the system.

I’ve concluded that the onus is not really on me——or anyone——to prove that the method works! The burden is on the skeptics to prove that it does not!

Sublime logic supports my premise and is certainly easier for someone to follow and accept than any logic that might be conjured up to support the validity of any form of trading, systems for reducing the risk that arises from a totally unpredictable activity, or for that matter the performance of averages or funds large enough to produce only diluted returns.

Show me any technical analytical method that is capable of producing results with few enough exceptions not to disqualify it from exclusive use. Show me anyone whose portfolios’ performances have consistently profited from the application of such a discipline!

There’s a plethora of books out there that purport to discredit the investment in individual companies. But none of them can do so because of the reasons I alluded to in the first paragraph of this comment. They can’t find any way to test this methodology, so they can’t disprove it either!

Ellis,

I’ve figured out a way to build customized benchmarks for any style of stock/bond portfolio. So it can be done.

Lowell