Dow wrote down his views on stock market predictability in editorials, which eventually became a set of rules coined the "Dow Theory."1 However, as there have been advocates of market timing, there have also been skeptics. Benjamin Graham writes that an investor that "places his emphasis on timing, in the sense of forecasting, . . . will end up as a speculator and with a speculator's financial results"2 (italics in original). I think we know what he meant by that. Strong academic interest in broad stock market predictability would not occur until the 1970s, when sufficient data and analytical tools existed to reliably test for predictability in stock returns. Early papers (e.g., Fama's 1970 classic work laying out the Efficient Markets Hypothesis3) found limited evidence of profitable trading strategies in U.S. stocks. By the late 1970s, however, inconsistencies in the Efficient Markets Hypothesis began to appear, as academics quantified the strong negative relation between future stock prices and short-term interest rates.4 Institutional interest in an exclusive market timing strategy began in the mid-1970s in response to the 1973-1974 bear market and in large part driven by academic research.5 William Fouse, who was then at Wells Fargo, marketed this strategy as Tactical Asset Allocation (TAA). The bear market alone did not create an environment for TAA. An additional key ingredient was the advent of the stock index and bond futures markets in the United States, markets that offered a low-cost and efficient method for implementing stock and bond tactical reallocations. Interest in TAA further blossomed after the 1987 crash as most TAA managers were positioned for a market correction. Global TAA strategies appeared in the late 1980s and early 1990s, as additional evidence on global asset predictability accumulated, and the number and liquidity of foreign futures markets increased dramatically.6 Global strategies added additional sources of value. Not only could they offer global market timing, but they also provided opportunities from country-level selection decisions in equities, bonds, and currencies. Unfortunately, by the late 1990s, the poor performance of many global asset allocators caused the industry to struggle. In particular, managers with a focus on valuation models and market timing underperformed-they under-weighted equities in a period of strong equity performance-casting a negative light 1www.e-analytics.com/cd.htm, a web site maintained by Charles Kaplan of Equity Analytics, Ltd. 2Graham, Benjamin, 1959, The Intelligent Investor (2nd revised edition), Harper 8c Brothers, 25. 3Fama, Eugene E, 1970, "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance 25, 383-417. 4A good example of these papers is Fama, Eugene E, and G. W Schwert, 1977, "Asset Returns and Inflation," Journal of Financial Economics 5, 115-146. 5For a more complete discussion of Wells Fargo and the development of TAA, see Siegel, Laurence B., Kenneth F. Kroner, and Scott W Clifford, 2001, "The Greatest Return Stories Ever Told," Journal of Investing 10, 91-102. sIn an extensive literature search, we found that the first use of the term GTAA to describe this strategy occurred in 1988: Givant, Marlene, 1988, "Taking a World View: $100 Million Fund Starts Global Allocation Strategy," Pensions and Investment Age, June 13, 2.