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Algorithms Made Simple

Traders Magazine, July 2004

Ingrid Eisenstadter

Sam (Samuel) Eisenstadt, chairman of research for Value Line's Investment Survey, is one of Wall Street's all-time great stock pickers. That's because Eisenstadt, with a 40-year record and an early user of algorithms, has superb numbers over a long period. Despite intermittent down years, Value Line has left all major market indexes in the dust: Since 1965, when the algorithm in use today was created, Value Line's recommended stocks have yielded (excluding dividends) a 46,060-percent gain, or 17 percent a year during the same period. That compares to 1,044 percent for the DJIA and 1,194 percent for the S&P 500, or 6.4 percent and 6.8 percent a year, respectively. How's that for an efficient market?

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