Why I Deserve My Own Mutual Fund

Forget this whole ETF thing baby, greed is good, passive investing is for wussies, and real men pick stocks!  As long as you believe that 3 months is an accurate frame of reference, then I am a genius baby!  In case you aren’t sure what I am referring to, check out my progress in the stock picking contest I entered at the beginning of the year (full disclosure, I do not support copying my unique investing style, in fact, I am so against it, that I don’t even invest my own money using it… not fair to the larger market).

My four stock picks of Apple, Halliburton, Kelly Services, and Berkshire Hathaway have a combined return of almost 17% year-to-date.  Sure this puts me around the average point of my esteemed colleagues, but far more importantly, it obviously conclusively proves that I am better at this whole investing thing than most mutual fund managers.  You see the S&P 500 (our relevant index) is up a measly 11.17% YTD.  This means that I have beat my index by an astounding margin.  When you consider that 9 out of 10 mutual fund managers can’t claim to beat their index, I think we can all agree that I deserve a yacht, a sports car collection, a corner office in a big investment building, and everything else that comes with managing other peoples’ money.

Comparing Apples To ?

Obviously I’m being facetious.  To be brutally honest, I’ve had one stock (Apple) that seems to be the trendy pick for the season, and it has exceeded my wildest expectations.  New estimates coming out have people saying the company is not even close to being done growing.  I don’t believe this is the case at all, but hey, I’ll claim that I knew it all along.  My other stocks have been decidedly pedestrian.  As unemployment numbers go down in the states, my highly touted temp agency (Kelly) should continue to do better.  Berkshire was an overall play on the American economy improving (hopefully this keeps up), and I truly expect Halliburton to be my big winner by the end of the year.  After all, it’s not hard to make profits when you have no soul (or so they tell me).

An Investment Strategy Your Kids Will Love

It is worth noting that the guy leading the contest Mr. Sustainable Personal Finance, has benefited from a massive leap in the valuation of one of his core holdings.  What industry is thriving in these uncertain times you might ask?  Marijuana sales apparently!  Yes, he invested in a legal marijuana company.  I have some friends from high school that decided to invest in the same industry… if not necessarily on the stock market.

Show Me The Money Jerry!

After seeing results like this and doing the math on compounded 17% returns, I can see how people get tempted into playing this stock picking game.  It is like gambling on steroids.  I can definitely see how fund managers become egomaniacal when playing with other peoples’ money.  It’s a heck of a siren call to think that you are smarter than everyone else out there, and that you can take advantage of this fact.  Of course, I know that other people out there have supercomputers and actually know how to read balance sheets as well as cash flow statements etc, but I could still know more about the stock market than they do right?  Well, all evidence to the contrary, I’ll stick with my ETF investing strategy for the time being.


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11 years ago

I am pretty sure I heard somewhere that most of the growth in the NASDAQ was due to Apple.

BTW, I do believe you are correct. AAPL has seen its stock run up due to “trendiness”, but I think they are not done growing.

” I have some friends from high school that decided to invest in the same industry… if not necessarily on the stock market.”

I LOVE IT, you made me laugh. I like owning stocks but I am one of those buy and hold people.

11 years ago

I love your disclosure saying that you don’t even follow this advice. Classic!

I am 100% for passive investing. But there will always be that part of me that wants to invest more actively. My solution: I have an amount of money that I can spare to lose and have that as my play money. I invest in stocks and try to get some good returns. Every so often I’ll hit a home run and pick a stock that increases in value, but most of the time, I’m either average or below average (as in matching or trailing the market.)

Passive investing is great for your main strategy but I think it is ok to compliment it with some active investing. As long as you can handle the risk and deal with negative consequences, then you are fine to play around a bit.

11 years ago

I am working on the active investing – passive investing mix. But you are right when you say it is very exciting when you see your picks prove you as smart, or lucky, Right now I am following my stock picks without investing in them (if only I had the money). Can’t say I have returned 17% but I am pleased.

11 years ago

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