Re: Active Stock Picking vs. Indexing Challenge
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rock,
So are you saying...
MIK vs MDY
PRAA vs IJR
MMM vs SPY
STX vs IYW (?)
RSTI vs ??? (Scientific & Technical instruments)
CREE vs MDY
SIRF vs ??? (Scientific & Technical instruments)
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Sniper, you are still one of my favorite posters but obviously I would be losing no matter what index or sector I had picked. Here is what I originally said:
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I will pick an index mutual fund or etf that corresponds to the asset class of those equities (i.e. if you want to pick small caps i would pick IJR, midcaps MDY, micro I would choose IWC, etc)
I will bet I am ahead after any time frame longer than 6 months.
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Since this guy picked stocks from a wide range of capitalizations, I would have to choose the appropriate index against each security.
In retrospect, my challenge was illadvised because the logistics are nearly impossible, but these particular securities illustrate my point beautifully.
He and Jim Cramer did some great stock picking and he is only up 1.6 units in about 4 months. He had the benefit of Cramer touting the stocks to millions of people and still is barely winning from my perspective, although he could be way ahead or it could be closer to even in 2 months.
Not sure what is troubling you with RSTI and SRFI. The marketcap and PE of RSTI stock means I would either pick IJR or IJT. I would choose IGW or something similar vs SRFI.
I hope this clears up some of your frustration and confusion.
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