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Stock Market Stuff

I haven't posted about the stock market in a while. My real life portfolio closed up .62%, which was better than the Dow (.39%), the Nasdaq(-.53%), and the S&P (.18%). So I beat the market again today. YAY!. The Dow and S&P are at 5-year highs, and the Russell 2000 is at an old time high.

If you combine stock market performance with the fact that unemployment is hovering under 5%, you have to say that the economy is doing pretty well.

I should also point out that I am doing really crappy in the Cashin' In Challenge. I am in the top 40%, but I am getting beat by all of the panelists, as well as the S&P 500. Doing well in my RL portfolio and crappy in the contest has become the norm. There are several reasons for this. I'm more careful with real money than I am with play money. My objectives in my RL portfolio are different. I want to beat the market over a period of many years, whereas in the contest I have to beat some really good people over a period of one year. Finally, I am restricted in the contest to 5 holdings. I don't do well with that restriction. I have heard that some of the most successful traders have more losing trades than winning trades. They are successful because they cut their losses on the losers and their winning trades are really good. Traders like that would probably not do well in the contest.

A few weeks ago on Cashin' In Dagen McDowell was debating Wayne Rogers on whether individual stocks are better than mutual funds. Both have won the challenge in various years, and were using their victories to bolster their cases. (McDowell was a mutual fund person, Rogers, the individual stock person).

The conclusion I have come to is that if you are going to only have 5 holdings, you either need to use mutual funds or be as good a stock picker as Wayne Rogers. And history shows that the good stock picker can lose to the mutual fund lady.