Feb

29

Msn.com doesn't seem to have an archive of Vic and Laurel's articles from the early 2000s, but I was fortunate enough to have made copies of them. Now I'm curious to know how some of their stock picks and pans did over the intervening 10 years or so.

I decided to take a look at a January 2002 article, "Companies that speak softly carry big profits". The theme of it was that perhaps firms with mild-mannered, self-effacing CEOs might outperform boastful firms that say "We're Number 1!" Vic and Laurel were bullish on the "Modest 10" and bearish on the "Boastful 13". Their subsequent performance is given below.

8 out of 10 of the "Modest 10" firms saw positive total returns on their stocks between then and now, led by Electrolux (ELUX), with a 321% return. The average return was 67%. That's not too bad.

Of the "Boastful 13" firms, 10 of the 13 saw negative returns, including 3 that lost at least 90%. To repeat, 8 of 10 of the Modest 10 were winners; 10 of 13 of the Boastful 13 were losers. Nevertheless, in terms of average return, the Boastful 13 won out over the Modest 10. One of the Boastfuls, Priceline.com, gained 1,454%! That drove the average for the Boastful 13 up to 107%, beating the average for the Modest 10.

Priceline's indiscretion that put them in the Boastful 13 was to proclaim that "Priceline will reinvent the environmental DNA of global business..[and produce]..a totally different form of energy". (Did Shatner write that?) Vic and Laurel had sought companies that said "We're Number 1", but they reasoned that even though Priceline's pronouncement didn't match that exact wording, it was still fairly boastful, and I agree.

Here are the details:

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