Hacker News·4 min read·medium

I backtested my own stock rankings. They lost to the index

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I backtested my own stock rankings. They lost to the index
AI Summary

The author explains how backtesting stock rankings using hindsight and survivor bias creates misleadingly high performance charts. They demonstrate that these models often fail to replicate real-world results because they rely on data that was not available at the time of investment.

Every fundamentals site can show you a chart where $1,000 turns into $40,254. Mine did, for seven months. The arithmetic was correct and the chart was worthless. The honest version of it argues against the product you're currently reading about.

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