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Email: heard@[Link] FINANCIAL ANALYSIS & COMMENTABY
The Darts Beat the Experts in Investing
No animals were harmed Absolute return of long (*rrii) or short (I) packs April23,2018-April22,2019 contest didn't consider the
in this financial experimeitt, hefty management and per-
but some human egos were SOHN EX HEARD DARTS formance fees such stars
bruised. command, but Warren [Link]-
i:l3"3% $Sr rett B:usi n.g$S..Set'vi ceS
Burton Malkiel famously
i:..
.:
. .. ,. fett did in a lO-year contest
wrote in 'A Random Walk Eros lnternational ending in 2Ol7 that sug-
Central Pacific Financial
Dornm Wall Street" that "a
::
gested even more strongly
Assured Guaranty
blindfolded monkey throwing Organovo Hotdings that active management is
darts at a newspaper's finan- for chumps.
cial pages could select a CVS Health Fund manager Ted Seides
portfolio that would do just SPDR S&P Oil & Gas rk, F'l ote,ls & Re$,0.r'ts..
"invested" a notional sum in
as well as one carefully se- ExOloiation,& Pro uttion ET,F .,,,., . .. .,Pa five hedge funds of his
lected by the experts." A Box Natural Resource Partners choice while Mr. Buffett
year ago, the journalists at chose an S&P 500 index
Facebook
:: ]
Heard on the Street decided ::
Xcel Energy fund. The Oracle of Omaha
to see if they could beat the lr, D,R,HOtrt$n prevailed in nine years oilt
' , ,,',,,,,, , ,[Link] Digita.l. of 10, racking up a return of
crdme de la cr6me-fund fxpiess Sdripts ",,'
managers presenting their Fouf Corne rS, P ioPertV:Trtt st L26o/o compared with just
stock picks at the annual , ,,,,, ,Whitbread 36o/o [Link] the funds after fees.
Sohn Conference in New Pal6 Alto Netryotiks Paychex The good news for inves-
York. :
i ""'i"' tors looking for a leg up is
Aveiage s&P 500 S&P 5OO Average that there is no reason to
The results were brutal.
-9.7o/o
11 10/
I t.t /o 11j% +17.3o/o
pay $5,000 for a seat at
Heard columnists, not mon-
keys, threw the darts at Source: WSJ calculations usinq FactSet data Monday's Sohn Conference-
newspaper stock listings, but though of course the money
Mr. Malkiel would still ap- pick among Sohn speakers spectively. measured by the raw goes to a good, charitable
prove. The columnists' eight with Palo Alto Networks. Li The best of the dart-de- performance of a handful of cause. The even better news
long and two short picks Ran of Half Sky Capital had rived picks was a long on stocks for just one year. is that Heard's columnists
beat the pros'selections by a the single worst one with payrrcll processor Payche& They have a point, but unfair will be throwing darts again
stinging 27 percentage Grubhub, but Jeffrey Gund- while the worst was Barrett to whom? this week and publishing the
points in the 12 months lach of Doubleline whiffed Business Services, but we These days, even those in results for the $+.OO cover
through April 22. Oriy" three more in absolute terms. He chalk our rare miss up to the right tax bracket to gain price of the newspaper-just
of L2 of the Sohn picks even recommended a pair trade- sweaty palms. entry into a hedge fund run 40 cents per pick. You even
outperformed the S&P 500. selling Facebook short while Masters of the universe by the likes of David Einhorn get the rest of the newspa-
Glen Kacher of Light buying a fund of oil produc- and their fans might might choose a low-cost in- per free.
Street Capital had the best ers. They rose and fell, re- consider it unfair being dex fund instead. The darts Spencer Jakab