Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Chris J. Horne who wrote (14414)	6/13/2000 4:11:00 PM
From: Mr. BSL	Read Replies (2) \| Respond to of 15132

My purpose in posting the indices ... All true. I agree with your view of BB jockeying for position with the major indices. My purpose in posting the MDY (S&P 400 mcap) is that it is better benchmark for investors who buy individual stocks IMHO. Individual investor tend to hold more or less equal amounts of each position, unlike the S&P500 that has 25% in 10 stocks and 75% in the other 490 stocks. MDY is cap weighted but not nearly to the extreme of the S&P500. Mr. Smith (the S&P500 investor) and Mr. Jones (the individual stock picker) each had $100K at the beginning of 1998. Mr. Smith bought an S&P500 index fund for 1998 and made about 27%. Mr. Jones really did his homework and picked what turned out to be the 50 best performing stocks in the S&P 500. He put equal amounts in each stock and ended up underperforming Mr. Smith by about 8%! Had Mr. Jones picked the 40 best stocks from the S&P400, he would have faired even worse. Bottom line - The S&P500 is a good market benchmark for S&P 500 index investors but a poor market benchmark for investors of individual stocks. The valueline unweighted benchmark is probably the best for them. FWIW, Dick