Many quant strategies broke down over the last two years. An important reason may be that these strategies rely on historical data and backtesting. The resulting strategy that passes these tests can only work if the underlying markets stay structurally similar. So when the credit market went chaotic, or anything systematic happens, some of these strategies can run into difficulties. What you thought as market neutral may no longer be the case, as new systematic risks emerge.
By design, a quant strategy has a strong "momentum" flavor built in. You hope that the strategy carries enough momentum to work in the next period. So when there is a structural turn, the strategy may get you exactly where you don't want to be.
This is not to say that these strategies should all be abandoned. Far from it.
We should improve by at least trying something new, something that's not so commonly done. Regardless, we think having a way to incorporate certain "value" element based on outlook or expectations is a good balancing act. But, you don't want to rely on analysts forecasts. They're often too tied up to that particular industry.
A good quant analyst should become a fundmental analyst himself/herself.
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