Quantitative Common Sense

I am fascinated by the fully mechanical approach to investing but there is a major flaw that keeps me from implementing it in my own portfolios. Advocates of fully mechanical, systematic approaches to investing and trading quite correctly note that it removes emotion and bias from the process. That can be a good thing. However, I find it difficult to pull the trigger even on a really cheap stock such as Hartford Financial Services (HIG) when the market has been strong and the stock is flirting with 52-week highs.

This approach can help investors take profits in a rational manner and it doesn't suffer from my inherent dislike of certain sectors and companies. Yet it also removes something I think is critical to the value investing process: the common sense that I honed from working in the markets for two and a half decades....537 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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