A Portfolio to Forget: Fortune Magazine’s 10 Stocks To Last The Decade

FE_DA_InvestingGraphs_111411Continuously towards the end of the year newspapers, and magazines worldwide are filled with predictions, stock recommendations and trading ideas. We like many other top financial bloggers highly disregard these terrible ideas and think you should ignore them as well. It’s ironic how if you examine issue to issue you don’t tend to see them being all to consistent and never talking about their past successful picks, as most of the time there are none. We have always said that actions speak louder than words so if you can, always let your performance speak for itself. And for that, we present Fortune: 10 Stocks To Last The Decade A few major trends will likely shape the next ten years. Here’s a portfolio we can all forget.

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: $68.44)
5. Broadcom (BRCM: $49.89)
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 over +70%, 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. Had you merely bought the S&P 500 Index over that same time period, you would have seen a gain of 23.43%.

Have fun forecasting and think twice next time you see that magazine cover that sounds too good to be true.

Source10 Stocks To Last The Decade

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