Barron's confesses to poor performance

Barry Ritholtz, writing on his Big Picture blog, applauds Barron’s for having the guts to admit that its stock picks have badly underperformed the stock market.

Ritholtz writes, “So whenever a major media outlet fesses up for their past advice — good and bad — the rarity of the event nearly make it a cause for celebration.  Such is the case with Barron’s annual review of their print magazine and online picks and pans. The past 3 years worth of long and short recs are all out there, for better or worse:

‘THE BEAR MARKET OF 2008, WHICH HUMBLED some of the most notable investment managers, also took a toll on stocks favored by Barron’s.

The shares of 108 companies that were the focus of bullish articles in Barron’s last year showed an average decline of 29.4%, versus a drop of 25.9% in the relevant benchmark indexes. The performance is measured from the Friday before publication through the end of 2008 and doesn’t include dividends.

This was the second year in a row that our picks lagged behind the indexes. Until 2007, we had consistently outperformed for several years.’

“Kudos to them for recognizing that accountability in the Financial Press matters, for collecting and revealing the track record, both good and bad.”

Read more here.