I was going through some old magazines I had saved for one reason or another when I came across an article in the Aug. 14, 2000 issue of Fortune, entitled “10 stocks to last the decade.” The timing of the article was interesting. We were five months into the three-year-long millennium bear market and this article was written during one of those sneaky rallies that often occur early in the market decline. Just for grins, I thought I’d see what would have happened if you had put $10,000 into each of the ten stocks back then and discover what you would have wound up with seven years later.*
$100,000 becomes $52,437
The best stock bet of the 10 was Genentech, where it looks like $10,000 turned into $17,569. The worst choice was Enron where $10,000 turned into ? let’s call it zero. It appears Morgan Stanley roughly broke even after they spun off the Discover card, and you would have had losses in the remaining seven. All told, your $100,000 investment in 2000 would have been worth $52,437.22 in 2007. Unless the writers were talking about a different decade, it doesn’t appear that their decade picks have done very well.
People like lists that claim to predict the future and financial magazines are written to give people what they like. Even a pedigreed magazine like Kiplinger included recent column pick lists featuring “low-risk buys” and “sleep-tight stocks” because they know we want someone to remove the uncertainty and tell us what will happen tomorrow. But they can’t, and often these fortune-telling lists cause us to make decisions that are not in alignment with our financial needs and goals.