One of my colleagues, a psychology professor who retired a few years back, had boasted that he
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One of my colleagues, a psychology professor who retired a few years back, had boasted that he had increased his initial stake of $10K by 50-fold to $500K in about 30 years of active stock picking (1987 - 2016). He further indicated that he would spend his weekends "hunting" for promising stocks that were just out of the IPO for a total "time investment" of about 5-10 hours per week. Ignore taxes for this problem (we can assume that he was mostly "buy and hold" investor with deferred taxes). Assume further that he also contributed about $5,000 per year for 30 years (on top of the initial stake).
- Comment on his returns (on money and time).
- Determine how well he fared relative to a passive S&P 500-holding strategy over the same time period (1987-2016).
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International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
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