Biggest Losers Of Finance Are Living Up To Their Billing

Roughly 15 months ago, I asked readers to compile a list of the worst stocks they could think of.  We were looking for crappy businesses: those that were destined for the toilet.

And my readers didn’t disappoint me—compiling a list of 23 stocks that they thought were headed towards financial purgatory.

Keep in mind, one reader’s idea of a stock destined for the sewer could be another reader’s promise of the Pierian spring.  Either way, I tracked the performance of those stocks, with reinvested dividends, and you can see the results below.

 

23 loser stocks
Sunday July 10, 2011 11:21 PM EDT

Cash

-$6,173.30

     

Overall Realized Gain/Loss

 

+$7,894.47

   

Total

$502,188.30

+$9,931.17

2.02%

-$6,091.47

 

AA

Alcoa Inc.

$14.35

$25,024.30

+$3,101.47

14.15%

-$168.05

 

AIG

American International Group Inc.

$40.17

$16,197.54

-$5,534.43

-25.47%

-$146.07

 

AOL

AOL Inc.

$28.52

$15,643.86

-$6,088.38

-28.02%

+$30.48

 

ATAC

ATC Technology Corp.

$18.21

$21,742.74

+$0.00

0.00%

+$0.00

 

BAC

Bank of America Corp.

$18.66

$12,495.40

-$9,295.53

-42.66%

-$256.91

 

BKC

Burger King Holdings, Inc.

$21.83

$21,871.48

+$0.00

0.00%

+$0.00

 

C

Citigroup Inc.

$46.20

$19,780.02

-$1,961.79

-9.02%

-$282.37

 

CIEN

Ciena Corp.

$18.07

$21,064.53

-$673.68

-3.10%

-$517.29

 

F

Ford Motor Co.

$12.80

$23,582.12

+$1,834.92

8.44%

-$407.76

 

GME

GameStop Corp. Cl A

$23.67

$24,648.30

+$2,919.24

13.43%

-$339.66

 

GT

Goodyear Tire & Rubber Co.

$13.96

$26,844.34

+$5,094.66

23.42%

-$311.60

 

JNPR

Juniper Networks Inc.

$31.26

$22,281.70

+$556.00

2.56%

-$514.30

 

KIM

Kimco Realty Corp.

$16.52

$26,761.71

+$4,088.00

18.03%

+$178.41

 

KKD

KRISPY KREME DOUGHNUT

$4.88

$42,535.70

+$20,800.18

95.70%

-$668.10

 

LLY

Eli Lilly & Co.

$36.89

$23,403.31

+$506.24

2.21%

-$86.89

 

MSFT

Microsoft Corp.

$30.35

$19,657.21

-$2,505.78

-11.31%

+$109.53

 

NTRI

NUTRI/SYSTEM

$18.92

$17,103.74

-$5,441.04

-24.13%

-$71.51

 

NWSA

News Corp. Cl A

$15.48

$23,770.34

+$1,807.92

8.23%

-$965.00

 

PFE

Pfizer Inc.

$17.23

$26,578.85

+$3,861.10

17.00%

-$92.29

 

STD

BANCO SANTANDER SA ADR

$14.45

$17,204.64

-$5,855.16

-25.39%

-$797.99

 

TXT

Textron Inc.

$22.55

$22,566.48

+$724.11

3.32%

-$154.96

 

USG

USG Corp.

$18.87

$15,978.24

-$5,760.00

-26.50%

-$576.00

 

ZION

Zions Bancorp

$24.58

$21,625.05

-$141.36

-0.65%

-$53.13

 

The worst stock of the bunch so far is Bank of America, down 42.66 percent.  The reader who picked that stock deserves our congratulations.  You got lucky, by picking the ugliest apple ahead of time.

Another reader figured that Krispe Kreme Doughnut was headed for the trash bin.  That reader was wrong, with Krispe Kreme gaining 95.7 percent over the past 15 months.

The second task I set for readers (at the same time) was to help me create a list of 10 superb, actively managed mutual funds.  The job was to choose funds that they thought would do well.

As great as these funds were supposed to be, I suggested that over the long run the funds’ fees would likely hamper their results, and that the stocks everybody hated might prove to be more profitable than the aggregate results of the mutual funds.

So far, the mutual funds are pounding the loser stocks.

Results from April 14, 2010 to July 9, 2011

  • The Ten Super Mutual Funds: +13.22 percent
  • The 23 Loser Stocks: +2.02 percent
  • Vanguard’s Total Stock Market index: +17.2 percent

 

Selected Super Funds
Sunday July 10, 2011 11:09 PM EDT

Cash

$196.04

     

 

 

Overall Realized Gain/Loss

 

 

 

+$6,890.59

   

Total

 Total

 

 

$566,077.62

+$66,077.62

13.22%

-$4,025.48

 

AMRMX

American Funds Mut;A

$25.87

$47,586.93

+$2,002.35

4.39%

-$299.51

 

ATHAX

Amer Cent:Hertge;A

$18.47

$65,425.32

+$12,551.18

23.74%

-$372.06

 

DODGX

Dodge & Cox Stock

$104.54

$55,800.63

+$4,963.98

9.76%

-$476.55

 

FMIHX

FMI:Large Cap

$15.19

$56,140.15

+$5,688.39

11.27%

-$431.85

 

FPURX

Fidelity Puritan

$17.00

$57,041.61

+$5,749.07

11.21%

-$452.47

 

FSENX

Fidelity Sel Energy

$45.61

$65,271.74

+$14,918.91

29.63%

-$430.51

 

LGVAX

LM CM Value Trust;A

$39.72

$51,200.60

+$1,232.84

2.47%

-$327.08

 

NEWFX

American Funds NWld;A

$52.59

$57,205.38

+$3,587.93

6.69%

-$367.03

 

PRFDX

T Rowe Price Eq Inc

$22.99

$55,323.91

+$4,137.62

8.08%

-$423.00

 

SSHFX

Sound Shore

$30.63

$54,885.31

+$4,354.77

8.62%

-$445.42

 

My hope of course, is for the Biggest Loser stocks to eventually surpass the super mutual funds above.

And why not?  As a group, the fund managers above haven’t added any value over the past 15 months.  Eighty percent of them (8/10) have underperformed Vanguard’s total stock market index.

As a group, they’re destined to fall even further behind the market.

But what do you think of the Biggest Losers?  Could they eventually surprise us and overtake the Super Funds above?  And what surprises you, so far, about this little contest?





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I’m happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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6 Responses

  1. Moneycone says:

    " Could they eventually surprise us and overtake the Super Funds above?"

    I'll say this about domestic financials – eventually yes, in the near future no. The same clueless management drunk with tax payer bailouts and bolder than before. Nothing's changed, why should the stock price change?

  2. Hey Moneycone,

    I would bet that they will catch those mutual funds, and be nicely positioned ahead of them, a decade from now. Of course, I wouldn't bet much $….because you never know!

  3. Andrew,

    I was JUST thinking about this series and then, wham, I find your post in my inbox. Great minds think alike…. 🙂

    My hope is your hope, the Biggest Loser stocks will surpass the Super Funds – but it will take time. 15 months is not a long time horizon.

    Are most of these stocks dividend-payers? At least with the dividend-payers, you're getting paid or the stock is reinvested for free when prices are cheap, the market is sideways (or worse).

    The Super Funds, well, they haven't beaten the market and they take your money too – via fees. Ouch.

    I'm not surprised the fund managers haven’t added any value over this time period, the market has taken a beating and who could know if these companies could or could not rebound? Over time, all these funds will fall by the proverbial way-side.

    Thanks for the update Andrew!

    Mark

  4. Thanks for your comment Mark,

    I do think that most of those stocks pay dividends. Every once in a while, I check in on them and receive a notification from SmartMoney's portfolio tracker, asking me if I want to reinvest the latest dividends. And of course, I do!

  5. Barry says:

    *BUMP*

    Any chance of an update, I'm making my way through the various posts, however with no year (only day & month) some of the dates have been confusing and the posts old.

    I'm off to check out the book "The Millionaire Teacher" though ;o)

    Barry

  6. Thanks Barry!

    I should do an update soon. I think the loser stocks are doing poorly, based on a guess.

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