Buy-and-Forget Portfolio: 10 Stocks To Last The Decade
Posted By Barry Ritholtz On December 20, 2012 @ 7:15 am In Financial Press,Investing,Really, really bad calls,Valuation | Comments Disabled
This time of year, newspapers and magazines are filled with predictions and stock recommendations and trading ideas. I have repeatedly explained [1] why these are terrible ideas [2] and you should ignore them [3].
Sometimes, you just have to let the performance speak for itself. And for that, I present Fortune: 10 Stocks To Last The Decade A few major trends will likely shape the next ten years. Here’s a buy-and-forget portfolio to capitalize on them.
August 14, 2000
1. Nokia (NOK: $54)
2. Nortel Networks (NT: $77)
3. Enron (ENE: $73)
4. Oracle (ORCL: $74)
5. Broadcom (BRCM: $237)
6. Viacom (VIA: $69)
7. Univision (UVN: $113)
8. Charles Schwab (SCH: $36)
9. Morgan Stanley Dean Witter (MWD: $89)
10. Genentech (DNA: $150)
Closing prices December 19, 2012:
1. Nokia (NOK: $4.22)
2. Nortel Networks ($0)
3. Enron ($0)
4. Oracle (ORCL: $34.22)
5. Broadcom (BRCM: $33.28)
6. Viacom (VIA: $54.17)
7. Univision ($? )
8. Charles Schwab (SCH: $14.61)
9. Morgan Stanley Dean Witter (MWD: $14.20)
10. Genentech (Takeover at $95 share)
The portfolio managed to lose 74.31%, with 3 bankruptcies, one bailout, and not a single winner in the bunch. Even the Roche Holdings takeover of Genentech was for 37% below the suggested purchase price. The lesson is that valuation matters.
(Update: Forgot about Univision takeover — I’ll pull the TO price and recalculate when I get into the office)
(Update 2: Yeah, I forgot about Oracle 2 for 1 split — I’ll adjust that as well Broadcom 3 to 2 split)
Had you merely bought the S&P500 index via the Spyders, you would have seen a gain of 23.43%.
Have fun forecasting!
Previously:
Apprenticed Investor: The Folly of Forecasting [1] (TheStreet.com, 06/07/05)
2008 Investment Guides Are HILARIOUS [2] (December 31st, 2008)
UPDATED: Worst Predictions for 2008 [4] (December 31st, 2008)
Investing in 2012: Get ahead of forecaster folly [3] (WaPo, December 30 2011)
Source:
10 Stocks To Last The Decade [5]
By David Rynecki FORTUNE Magazine, August 14, 2000
http://money.cnn.com/magazines/fortune/fortune_archive/2000/08/14/285599/index.htm
[6]
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2012/12/10-stocks-to-last-the-decade/
URLs in this post:
[1] explained: http://www.thestreet.com/story/10226887/1/apprenticed-investor-the-folly-of-forecasting.html
[2] terrible ideas: http://www.ritholtz.com/blog/2008/12/2008-investment-guides-are-hilarious/
[3] ignore them: http://www.washingtonpost.com/business/investing-in-2012-get-ahead-of-forecaster-folly/2011/12/29/gIQAGx2OQP_story.html
[4] UPDATED: Worst Predictions for 2008: http://www.ritholtz.com/blog/2008/12/worst-predictions-for-2008/
[5] 10 Stocks To Last The Decade: http://money.cnn.com/magazines/fortune/fortune_archive/2000/08/14/285599/index.htm
[6] Image: http://www.ritholtz.com/blog/wp-content/uploads/2012/12/nice-performance-there.png
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