GHOST OF INVESTMENTS PAST: Barry Ritholtz of the The Big Picture is one of our daily reads, as we’re big fans of his mix of investment advice and whatever thoughts happen to be occupying his mind on any given day. Agree or disagree, the man is never uninteresting. Recently Barry dug up Fortune Magazine’s “10 Stocks to Last the Decade” article from August 2000 and we can only hope that Fortune is suitably embarrassed. Here are the results as given by TBP:

August 14, 2000

1. Nokia (NOK: $54)
2. Nortel Networks (NT: $77)
3. Enron (ENE: $73)
4. Oracle (ORCL: $74)
5. Broadcom (BRCM: $237)
6. Viacom (VIA: $69)
7. Univision (UVN: $113)
8. Charles Schwab (SCH: $36)
9. Morgan Stanley Dean Witter (MWD: $89)
10. Genentech (DNA: $150)

Closing prices December 19, 2012:

1. Nokia (NOK: $4.22)
2. Nortel Networks ($0)
3. Enron ($0)
4. Oracle (ORCL: $34.22)
5. Broadcom (BRCM: $33.28)
6. Viacom (VIA: $54.17)
7. Univision ($? )
8. Charles Schwab (SCH: $14.61)
9. Morgan Stanley Dean Witter (MWD: $14.20)
10. Genentech (Takeover at $95 share)

As Ritholtz writes:

The portfolio managed to lose 74.31%, with 3 bankruptcies, one bailout, and not a single winner in the bunch. Even the Roche Holdings takeover of Genentech was for 37% below the suggested purchase price. The lesson is that valuation matters.

…Had you merely bought the S&P500 index via the Spyders, you would have seen a gain of 23.43%.

Our question: suppose you wanted to pick a basket of stocks that will have performed this badly ten years from now–could you do it? That’s what makes Fortune’s predictions stand out–we think it would be very difficult to do this bad even if you were trying your best.

In a similar vein, TBP also linked to an article in New York magazine which pulls up investment advice from 2008, a more innocent time when people still believed that the housing market wasn’t doomed for a generation or two. Our favorite is this one:

Elaine Garzarelli, president of Garzarelli Capital, in Business Week’s Investment Outlook 2008
What she said then: “Garzarelli is advising investors to buy some of the most beaten-down stocks, including those of giant financial institutions such as Lehman Brothers, Bear Stearns, and Merrill Lynch. What would cause her to turn bearish? Not much. ‘Our indicators are extremely bullish.’”
What we know now: As of January 1, none of these firms will still exist. Lehman went bankrupt. JPMorgan and Chase bought Bear Stearns in a fire sale. We all know Merrill’s fate.

It is of course not too hard to find bad advice in hindsight, as everybody says and believes stupid, wrongheaded things at every moment in their lives. The hard part is knowing which of your current beliefs are the stupid ones.

USAIR 40,000 CREDIT CARD: Coming on the heels of the announcement from Delta, the usual suspects over at boardingarea.com have mentioned there’s a new ‘official’ USAir credit card offer available. There’s been a 40,000 mile link on our Best CC Offers page for a while; this link was apparently intended for employees, although you could still get the card without being an employee. However it seems the new offer does not give you 10,000 miles on your anniversary, so we’re leaving the old link unchanged on our offers page.

NEWTOWN SCAMMERS: It shouldn’t surprise you, but yes, people are using the Newtown massacre to scam money from the generous. If you’re of a charitable bent, be skeptical and give wisely.