Home > General, Markets > Black clouds, black sheep, red ink

Black clouds, black sheep, red ink

December 20, 2010

A friend  writes: “About 18 months ago, I compiled a list of stocks for a buy-and-hold portfolio.  As of today, it’s down 3.2% (excluding dividends). Going back further, my “sure-thing” portfolio is down 9.7% (excluding dividends).

Rocky notes that since December, 2008, the S&P500 has risen about 42%, and the “average” (non-market-cap-weighted) stock has gained  about 75%. Interestingly, however, 57 stocks in the S&P500 have declined in price during this period!

Losing money during one of the biggest rallies in history is like walking around with a black cloud over one’s head. (A meteorological phenomonen with which Rocky is very familiar.)

In the spirit of the TV game show with-the-same-name, “The Biggest Loser” turns out to be Dean Foods Company (DF) which produces private label dairy products. Dean Foods has lost about 55% of its value during the past two years. The CEO of Dean Foods surely wishes that instead of “milking” his company dry,  he had invested in the poultry business — and raised a few “golden” geese, which could have flown above the black clouds.

[Disclosure: Rocky has never invested in Dean Foods. He welcomes bad puns that involve milk companies that turn sour, but acknowledges the futility of crying over spilled milk.  He also notes  that investing in a “boring” S&P500 Index Fund can makes tons of hay when the sun shines.]

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  1. Jack Tierney
    December 22, 2010 at 7:47 pm

    Rocky,

    I hadn’t checked your blog for several days but just noticed this post. A black cloud indeed. However, not all is loss. In Oct. of ’08 I submitted this post:

    http://www.dailyspeculations.com/wordpress/?p=3202

    The body of the text was reproduced but my selections which were included were omitted. I’ve attached those selections and their prices as of 10/8/08 when I wrote the post.

    The only disturbing element is that there are only 16 on the list and I could have sworn there
    were originally 17.

    In any event, my Yahoo portfolio report indicates a 76% return…certainly better than the other two but, cumulatively, nothing to recommend a future in the profession.

    Jack

    CPN 9.53
    SLT 6.55
    NGPC 12.20
    INSU 12.51
    IPSU 11.25
    CX 10.12
    UTG 14.37
    CBI 12.26
    NLC 14.25
    AOB 5.03
    CVI 4.41
    GPOR 6.77
    TYY 13.90
    BIP 12.07
    MWA 6.99
    ICO 4.16

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