Since we mentioned our Fools Being Dumbagents article last week, we thought we should probably give a recap of how the investments are going.
As a recap, Motley Fool’s CAPS is a website where investors can gather to rate stocks. Each member can rate a stock, and say whether they think it will outperform or underperform the trading indexes, by how much, and within which time frame. The results are then aggregated by Motley Fool in order to show which stocks are rated highest and which lowest.
Being proponents of the Dumb Agent Theory, we thought this would be a good chance to see it at work. So we recorded the stock prices of the top 10 rated stocks, as well as the bottom 10 and decided to see how we would’ve performed had be bought the Top 10 and shorted the Bottom 10.
We had a recap 3 months later, but then neglected it for some time. Now that almost a full year has passed, we thought it would be a good time to check back in.
As can be seen, if we had bought 100 shares each of the Top 10 and shorted 100 shares each of the Bottom 10 we would have a net profit of $8,829.10. Not bad.
Not to shabby. An overall 25% return since December 11th, 2008 vs:
19.3% return of the DJIA
38.90% of the S&P500
26.55% of the Nasdaq
for the same period.