The Biggest Losers Beat The Olympians Out of the Blocks

Readers:  Thank you for putting together the worst portfolio you could think of.

I asked you to put together a collection of stocks that you thought were utterly hopeless.  Of course, one person’s junk is another person’s treasure….but the bottom line is that you, as a collective group, were trying to create the worst portfolio of stocks that you could.

But I think your “lousy portfolio” has a chance of beating the professionals–if we leave it alone and don’t mess with it.

You also submitted the top 10 U.S. mutual funds that you could find.  And you certainly put together a list of “All Stars”.  Well done!

But how will your “loser portfolio” after all commission and transaction charges ($9.99 per commission purchase) stack up against the average results of these 10 “All Star” mutual funds, after all commissions and charges?

Right out of the starting gate, your biggest losers are beating the metaphorical Olympians.  Of course, this is a marathon and not a sprint, but the biggest losers might maintain their lead–or pull even further ahead in the years to come.  Fund managers will buy and sell stocks within these “All Star” mutual funds to gain an edge–that’s what they’re paid to do.  They’ll follow trends, interest rates and the latest political news.  But with the loser portfolio, we will do NOTHING.  No buying, no selling—we’ll do absolutely nothing.

To read about how it might be possible for our “loser portfolio” to actually win, check out the theory behind the efficient market hypothesis:  … read more

For a complete list of stocks in your “Loser portfolio” check this out.

Portfolio: 23 Loser Stocks – 15/04/2010

And for the group of professional funds (that are actually TRYING to do well)….here they are:

Portfolio: Selected Super Funds – 15/04/2010