Wednesday, November 6, 1996
Empirical Analysis
by Crisp 1964

Empirical analysis is a scientific approach to analysis based solely on experiment and observation rather than theory. Objectivity and the elimination of emotions are the foundations and goals of true empirical analysis. My first realization when I began studying investing was that the majority of investors (institutional and individual) make decisions based on emotion and feeling.

I was fortunate that one of the first books I read was Michael O'Higgins' Beating the Dow. His book is the only one I've found that eliminates subjective decision making and establishes a proven simple model for investing. The Foolish Four and Investing for Growth models are continuing to apply empirical approaches to investing. I hope investors are Foolish enough to realize the magnitude of empirical investing and the changes it will force on investing.

Since this is a fribble and it is a requirement to have a laugh, a quick Halloween story for you. A young trick-or-treater rang my doorbell and stood before me holding an empty picture frame with his face where the picture would normally be. "What are you," I asked. The kid replied, "I'm a Kodak moment." Very Foolish, obviously a Beating the Dow family.

Transmitted: 11/6/96