RT Journal Article SR Electronic T1 Practical Applications of Rip Van Winkle Indexing JF Practical Applications FD Institutional Investor Journals SP 1 OP 5 DO 10.3905/pa.2016.3.3.138 VO 3 IS 3 A1 Robert D Arnott A1 Noah Beck A1 Vitali Kalesnik A1 Gauri Goyal YR 2016 UL https://pm-research.com/content/3/3/1.5.abstract AB Rip Van Winkle Indexing Robert D Arnott Noah Beck Vitali Kalesnik A new piece of research debunks the efficacy of the link between current price and market-cap weighting in stock selection, using a hypothetical “Rip Van Winkle” index portfolio based on stale, 20-year-old prices. When old Rip wakes up, he finds that his strategy outperforms a portfolio using current prices of the largest market-cap-weighted stocks.Co-authors Robert Arnott , Noah Beck and Vitali Kalesnik of Research Affiliates created this controlled experiment to provide a fresh perspective on the impact of prices on cap-weighted approaches, and find that such approaches come up short.“It’s another nail in the coffin of efficient market theory. You can ignore 20 years of information—and still outperform!” says Arnott.