Is Jay Cordaro Smarter Than a Chimpanzee?

The old saw is that you could get a better return on your money by hanging the Wall Street Journal stock listings on the wall and have a chimpanzee throw darts at it and buy whatever stocks the chimp hit with the darts. Warren Buffett bet some hedge fund managers an S&P 500 index fund would outperform link. I have my method for picking stocks which I’ve detailed in this blog, and nobody cares about. Anyway, I compared my actual 5 year returns on an annual basis, including all fees, to passively buying the S&P 500 on 1/1/2008. Here’s the results:

Year Jay the Chimp S&P 500
2012 10.83% 15.88%
2011 12.37% 2.07%
2010 8.77% 4.87%
2009 2.49% 27.11%
2008 -13.15% -37.22%
Total Return 20.58% 8.42%
Annualized Return 4.11% 1.68%

Although 4.11% annualized return is not great, I’ll take it. I still think you can select a subset of stocks which will outperform the stock market as a whole. When I get around to it, I’ll show the data going back to 1999, when I started investing seriously. By the way, visit Money Chimp if you haven’t already. I got the S&P 500 returns data above, and most of the information I’ve used as the basis of my investing, from that site.

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