QuantitudeInvesting history
Updated 17 Oct 26
How investing strategies evolved
Each idea added a layer
Every big idea in investing started as an argument. This 56-second explainer follows four of them, in order, and shows why none replaced the last: each one added a layer.
Four ideas, in the order they appeared
- 1934 · Value. Benjamin Graham and David Dodd published Security Analysis. The argument: compare a stock's price with what the business is really worth, and demand a margin of safety. [GD34]
- 1976 · Indexing. John Bogle launched the first index fund for everyday investors (31 Aug 1976). Critics called it "Bogle's Folly". The argument: stop picking, own the market, cheaply. [VG76]
- 1992 · Factors. Eugene Fama and Kenneth French showed that size and book-to-market (value) help explain differences in average stock returns. [FF92]
- 1993 · Momentum. Narasimhan Jegadeesh and Sheridan Titman found that stocks that had recently done well tended to keep doing well over the next 3 to 12 months in their sample. [JT93]
Why it is a stack, not a succession
Value did not disappear when index funds arrived, and factor research did not end indexing. Each idea answered a different question: what is a business worth, how do I own the market cheaply, what explains differences in returns, and does recent strength persist. Many investors today use more than one of them.
The common thread is testing. An idea written down as a rule can be run on historical data first, and then compared with simply owning the market.
What this page does not say
These are historical research findings, each from a specific sample and period. They describe the past, they are not predictions, and nothing here is a recommendation about any security. History informs. It does not predict.
Rules, tested
Quantitude is a personal research platform built around that thread: write an idea as rules, test it on data, and look at the result before anything else.
Explore QuantitudeFull transcript
Narration, word for word
Every big idea in investing started as an argument.
In 1934, after the crash, Benjamin Graham and David Dodd published Security Analysis.
Their argument: compare a stock's price with what the business is really worth, and demand a margin of safety.
Four decades later, John Bogle launched the first index fund for everyday investors.
Critics called it Bogle's Folly. His argument: stop picking. Own the market, cheaply.
In 1992, Eugene Fama and Kenneth French showed that size and value helped explain stock returns.
A year later, Jegadeesh and Titman found that recent winners kept winning, for a while. Momentum.
None of these ideas replaced the last. Each one added a layer.
Today, many investors write ideas down as rules, and test them on data first.
That's the thread we follow at Quantitude. Rules, tested. Follow for the next chapter.
Sources
- Graham, B. & Dodd, D. (1934). Security Analysis. McGraw-Hill (Whittlesey House imprint). Introduces 'margin of safety'. Link
- Vanguard, '50 years. 50 facts. Indexing since 1976' — First Index Investment Trust launched 31 Aug 1976, nicknamed 'Bogle's Folly'. Link
- Fama, E. & French, K. (1992). The Cross-Section of Expected Stock Returns. Journal of Finance 47(2), 427–465. Size and book-to-market capture the cross-section of average returns. Link
- Jegadeesh, N. & Titman, S. (1993). Returns to Buying Winners and Selling Losers. Journal of Finance 48(1), 65–91. Momentum profits over 3–12 month horizons. Link