Related link: http://www.forbes.com/global/2002/0708/064.html
Over the past year, I’ve lost a lot of money (by my standards, at least). I was invested fairly heavy in technology. And even though I managed to avoid the dot-com flameouts (all of my investments are still in business), it’s pretty clearly been a bad fiscal year for me.
I’m still investing though. It’s a long term game, and I think that, in the long term, it’s good to own stock.
But I was curious. My personal investments are a combination of “invest in products you understand” and Benjamin Graham’s basic precepts. Maybe this is a bad way to pick stocks? Maybe professionals do better?
Among the professionals, no-one seems more confident, on a month-to-month basis, than Kenneth Fisher, who writes for Forbes magazine and manages a fairly large investment fund. So I picked an article of his at random from the pile of old issues of Forbes by my bedside (it’s also available on-line from
here) and checked up on his recommendations.
His recommendations for the month were: Aegon (AEG) at $19, Credit Suisse (CSR) at $34, Telstra (TLS) at $13, TDC (TLD) at $13, Ford (F) at $17, and Six Continents (SXC) at $11.
The one he liked the most was Ford. “A real steal.”
Currently, they’re trading at: Aegon (AEG) at $13.48, Credit Suisse (CSR) at $22.06, Telstra (TLS) at $13.64, TDC (TLD) at $12.55, Ford (F) at $10.20, and Six Continents (SXC) at $9.32.
He’s not doing so good either.
Have you performance-checked a stock picker lately?
A Random Walk
Check out "A Random Walk Down Wall Street" by Burton Gordon Malkiel.
It pretty much claims that throwing darts outperforms the average wall street pro (after expenses).
He's done a fair amount of research, taking many get rich quick hypotheses, and testing them out over the last 50 years of data.
Worth the read.