static measures like book-to-market value. The F-score formula inputs financial statements and awards points for meeting predetermined criteria. Piotroski retrospectively analyzed a class of high book-to-market stocks in the period 1976-1996, and demonstrated that high F-score selections increased returns by 7.5% annually versus the class as a whole. The American Association of Individual Investors examined 56 screening methods in a retrospective analysis of the financial crisis of 2008, and found that only F-score produced positive results. Over-Simplification of Value The term "value investing" causes confusion because it suggests that it is a distinct strategy, as opposed to something that all investors (including growth investors) should do. In a 1992 letter to shareholders, Warren Buffett said, "We think the very term 'value investing' is redundant". In other words, there is no such thing as "non-value investing" because putting your money into assets that you believe are overvalued would be better described as speculation, conspicuous consumption, etc., but not investing. Unfortunately, the term still exists, and therefore the quest for a distinct "value investing" strategy leads to over-simplification, both in practice and in theory. Firstly, various naive "value investing" schemes, promoted as simple, are grossly inaccurate because they completely ignore the value of growth, or even of earnings altogether. For example, many investors look only at dividend yield. Thus they would prefer a 5% dividend yield at a declining company over a modestly higher-priced company that earns twice as much, reinvests half of earnings to achieve 20% growth, pays out the rest in the form of buybacks (which is more tax efficient), and has huge cash reserves. These "dividend investors" tend to hit older companies with huge payrolls that are already highly indebted and behind technologically, and can least afford to deteriorate further. By consistently voting for increased debt, dividends, etc., these naive "value investors" (and the type of management they tend to appoint) serve to slow innovation, and to prevent the majority of the population from working at healthy businesses. Furthermore, the method of calculating the "intrinsic value" may not be well-defined. Some analysts believe that two investors can analyze the same information and reach different conclusions regarding the intrinsic value of the company, and that there is no systematic or standard way to value a stock. In other words, a value investing strategy can only be considered successful if it delivers excess returns after allowing for the risk involved, where