From Jim O’Shaughnessy of OSAM: Names change. Industries change. Styles come in and out of fashion, but the underlying characteristics of a good or bad investment remain the same. Each era has its own group of stocks to which people flock, usually those with the most intoxicating story. Investors of the 1920s sent the Dow Jones industrial average up 497%, buying into "new era" industries such as radio and movie companies. The 1950s saw a similar fascination in new technologies. Remember all the dot.coms of the late 1990s that soared on little more than a PowerPoint presentation and a lot of sizzle? Now we have bitcoin. The point is simple. Far from being an anomaly, the [spells of] euphoria of the 1920s, 60s and 90s were predictable ends to a long bull market, where the silliest investment strategies often do extraordinarily well, only to go on to crash and burn. A long view of returns is essential because only the fullness of time uncovers basic relationships that short-term gyrati...
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