[alttab]

"No one in the industry uses anymore"? Really?

Fama and French are still industry leaders, and they use the three factor model as the foundation of all of their portfolio management at Dimensional Fund Advisors, hands down the most successful mutual fund in existence. http://us.dimensional.com/process/multifactor.aspx

They continue to out-perform active fund managers, and they power a boat load of the investments for many American Corporations. And those American Corporations love to watch their money grow.

What makes you think these models don't still power successful financial products today?

[awkwit]

I highly doubt Dimensional are using a three factor model to manage their portfolios. Typical multi-factor models these days can have anywhere from 10 to 100 factors.

The concepts of the three factor model are important to learn but implementing one in practice is rarely done. These core factors are too crowded these days as all the quant funds are looking at the same factors.

[alttab]

You're talking about active management. That is not what DFA does so you clearly don't get the philosophy.

[throwaway13qf85]

The page you linked to is Dimensional explaining their five factor model, and it sounds like they only use that as a basis for a more complicated model.

The very example you gave to support your point actually detracts from it.