Can we beat the dow? The mirage of growth strategies

This paper implements the traditional contrarian strategy literature by testing the significance of value and growth portfolios formed on deviations between observed and discounted cash flow fundamental stock values. Our findings on the 30 stocks of the Dow show that growth portfolios significantly outperform buy and hold strategies on the Index. Arbitrage opportunities, however, disappear when the index is corrected for the survivorship bias. Hence, growth strategies may have been profitable only for those agents capable to pick winners with foresight.