Message Font: Serif | Sans-Serif
No. of Recommendations: 1

Well, you definitely resonate with me. I just noticed this on several of the top pickers. I too believe underperforms should be compared against the long S&P position.

Look at it this way. A "foolish" investor can either do one of two things.

1) Sit back, relax, and invest in the S&P index.
2) Go long and/or short away on several stocks (after rigorous due diligence of course).

Therefore, your theoretical CAPS performance should be compared against what option 1 would have achieved.

I doubt your broker would think you were sane if you explained to him/her that you were going to go long the S&P, but found this great stock to invest in. However, in the very same conversation you were also considering shorting the S&P, but instead found some doggy stock to short. It just doesn't make sense.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.