Smart Money?

Barron's "Big Money Poll" (a roundtable of large portfolio & mutual fund investment managers) weighed in this weekend with their Spring prognostications. By and large the pollsters were bullish on interest rates, they think the Dow Jones Industrial Average will see 12,000 by year end and think the Federal Reserve keeps hiking interest rates for awhile. In the same article Barrons also published "Big Moneys' stock performance on their cumulative picks and the the cumulative performance on the stocks they panned over time. For brevity I have taken the liberty to average each of these periods. That is Barron's tracks their performance in each year from 2002 until present on a 6 month and 12 month basis. The Poll has been conducted twice a year (Spring & Fall). Averaging each period the stock picks that they liked returned 6 months out 3.15% and 11.22% over the average of a cumulative year. The yearly average performance numbers were not too bad except when stacked up against the stocks they panned-those they did not like and specifically thought at the time of the polls were overvalued or should underperform the market during these respective periods. Those they turned a thumb's down returned 6.5% over 6 months and 16.58% over a year on average. Maybe not such smart money after all!

Source Barron's Magazine: May 1, 2006; Big Money Poll. Page 28. Data compiled by CarpenterAnalytix.com (I averaged the 6 and 12 month polls for the sake of brevity the individual breakdown of each period can be found in the above cited article).