There's nothing diametrically opposed with believing in factors and also believing in a dynamic, chaotic system. It's just an extension of efficient markets. Not all bonds are the same. The market prices in riskier bonds with a higher yield. Not all stocks are the same, the market prices riskier stocks with a higher discount rate. Sometimes the market pricing doesn't play out the way investors want it to over certain durations - that's part of the risk, but the market will naturally adjust to re-price accordingly. That's why the Value factor, despite having higher returns 80% of the time, goes through periods where the 20% shows up.I largely agree with you on this.
It's odd that you can hold this belief, and belief in factors (I see you have a heavy dose of SCV) simultaneously in your head. It must get confusing making diametrically opposed arguments in favor of such.
Statistics: Posted by Nathan Drake — Fri Mar 22, 2024 11:27 pm — Replies 5266 — Views 865983