This weekend is the first installment of the Barron's Roundtable. Included in the content is a PDF report card for the picks from last year's Roundtable (subscription required).
As I looked through all the results I saw a theme emerge that I write about a lot. If an investor picks a bunch of stocks for a portfolio they will get some picks wrong. Even the roundtable members can't get them all right, far from it. Meryl Witmer was the exception to prove the rule. Her worst pick was up 27%.
Not only were there some losers there were several names that lost 50%. This is important for do-it-yourselfers. You will make bad picks and lose money on some of your holdings. A few losers is normal. However, if you consistently have more losers than winners you might need to reevaluate what you are doing.
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2 comments:
If I could add one thing, which I will probably post about sometime in the near future, is that losers should be discarded. One of the reasons that the market goes up over time is the phenomenon known as survivorship bias. Both the S&P and the DOW remove companies from those averages after they have gone to worthless or merged with another company. There is only one remaining stock from the original DOW, and that's GE, lending support to the idea that your losers should be discarded and hang on to your winners.
pretty insightful and important
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