With the efforts I have been gaining to show up some misconceptions about investing in local stocks, I would have thought that I should be become by now public enemy number 1 from value investors. Sadly, I have read some attempts to discredit quantitative backtesting and I find that they are either holding back key information, or generally lack intellectual sophistication.

As such, I will take on the burden of criticising quantitative backtesting myself. This is because, of all people, I cannot afford to drink my own Kool-aid. Not only could I stand to lose money if my methodology is flawed, it can affect the portfolios of my students too.

There are, in fact, three valid responses when faced with quantitative backtesting data.

The first, which I support, is to simply accept that is a superior approach towards investing. The second is to disagree and argue that you can get superior returns because