Risk and Return
by MaestriSkill or luck? That’s the question The Wall Street Journal’s Investment Dartboard Contest sought to answer by pitting the stock-picking ability of professional analysts against both amateurs and stocks chosen by throwing darts at tables of stock listings.
Here’s how the contest worked. The Wall Street Journal (WSJ) picked four professional analysts, and each of those pros formed a portfolio by picking four stocks. The stocks must be traded on the NYSE, AMEX, or Nasdaq; have a market capitalization of at least $50 million and a stock price of at least $2; and have average daily trades of at least $100,000. Amateurs could enter the contest by e-mailing their pick of a single stock to the WSJ, which then picked four amateurs at random and combined their choices to make a four-stock portfolio. Finally, a group of WSJ editors threw four darts at the stock tables. At the beginning of the contest, the WSJ announced the pros’ picks, and at the end of six months, the paper announced the results. The top two pros were invited back for another six months.
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