I would never refer to myself as a quant, but statistics certainly rule my investing style. If you can quantify the risk you can substantially increase the odds of you being right over the long-term. This is not only applicable to the stock market, however. Every year I use statistical analysis to make my March Madness picks. Apparently, I am not the only one nerdy enough to do this. The numbers are pretty convincing despite the small data-set:
In the last 4 years since I began using this stat based approach I have finished in the 98th percentile (hundreds of thousands of entries) in Yahoo’s overall pick ’em tourney 3 times with one unfortunate ranking in the 35th percentile. I had Kansas going to the final four and they choked in the second round of the tournament….Overall, this stat based approach has resulted in an average finish in the 82nd percentile. Not bad. This years picks are below:
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Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.