I’ve posted Podcast #177 to the “RobCasts” section of the site. It’s called All About Backtesting.
Backtesting is good because it is a way of testing an investing theory emperically. Backtesting is bad because those who employ cherrypicking of results can use it to argue for fanciful correlations. Both things are so. We cannot learn about investing without making use of backtesting but we need to be wary of its dangers.