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Chapter 15. Ten Lessons for Investors > Lesson 1: The more things change, the m...

Lesson 1: The more things change, the more they stay the same

Each of the investment stories listed in this book has been around for as long as there have been financial markets. Notwithstanding this reality, investment advisors rediscover these stories at regular intervals and present them as their own. To provide a faéade of novelty, they often give these stories new and fancy names (preferably Greek). Calling a strategy of buying low PE stocks the Omega or the Alpha strategy seems to do wonders for its curb appeal to investors. In addition, as more and more data on stocks becomes available to investors, some investors have become more creative in how they use this data to find stocks. In fact, the ease with which they can screen stocks for multiple criteria—low PE, high growth and momentum—has allowed some investors to create composite screens that they can then label as unique.

Proposition 1: Be wary of complex, fancifully named investment strategies that claim to be new and different.


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