The pitfalls of 'backward-looking' asset allocation models

Jenson Button sits on the front row of the grid at Silverstone having qualified in pole position for the 2012 British Grand Prix. As the race steward switches on the red starting lights, the air fills with the roar of 25,000 partisan spectators and the ear-piercing howl of Button’s engine straining at 15,000 rpm held stationary on its launch control system. Just as the five red lights start their countdown to green, a McLaren engineer leaps out and runs onto the track, places a small black screen on Jenson’s car directly in his driver’s line of sight, and the pit radio crackles into l...