You may not realize it, but in Melbourne, Australia, a hotly contested "Battle of the Tipsters" is being waged. Since December, a local newspaper, the Sunday Herald-Sun, has been tracking the performance of five people invited to invest an imaginary $10,000 (Australian dollars, that is) in five stocks each. Each week they may hold their portfolios steady or buy and sell a maximum of two stocks.
The five people include a student, a nurse, a handyman, a clairvoyant, and Professor Neville Norman, a prominent Australian economist. Here's how they're faring, as of a week or so ago:
| "Battle of the Tipsters" | ||
|---|---|---|
| Student | $11,870 | 19% |
| Nurse | $10,808 | 8% |
| Handyman | $8,502 | -15% |
| Clairvoyant | $10,769 | 8% |
| Professor | $10,355 | 4% |
There are some lessons you might glean here. For starters, the amount of education you have doesn't necessarily correlate to how well you'll do investing. (The professor's unspectacular showing shouldn't really be surprising, as economics isn't all about studying the fundamental strength of businesses and how to invest in the stock market effectively.) The number of years you've spent on earth may not be worth much, either, given that the youngest competitor is in the lead. Also, apparently, clairvoyance may not be as promising a skill as we might have expected for stock market investing.
The most important lesson to draw here, though, is to ignore these results. They're very short-term -- reflecting just four months or so. Anything can happen in the short run. Even Warren Buffett, chairman of Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) or Peter Lynch, acclaimed former manager of FidelityMagellan (FUND:FMAGX) mutual fund, have seen plenty of investments go south over a period of a few months -- or even years. What matters to us long-term investors is the long-term performance.
Still, contests like these are fun. Done with young people, they can spark a valuable life-long interest in investing -- just be sure to explain how unpredictable and even meaningless short-term results can be. Invite a teenager you know to poke around our Teens and Their Money area -- and perhaps in a few years she'll be a proud investor in General Electric (NYSE:GE), Nike (NYSE:NKE), McDonald's (NYSE:MCD), Starbucks (NASDAQ:SBUX), and eBay (NASDAQ:EBAY). Or point teens to our book, The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of.
Longtime Fool contributor Selena Maranjian owns shares of Berkshire Hathaway and eBay.
