Lesson From a Parrot: Buy and Hold Blue Chips
SKY NEWS -- A five-year-old female parrot called Strawberry has proved to be smarter than human investors in a stock investment contest. The parrot from Papua New Guinea finished third in the six-week challenge, said Paxnet, an online stock market information provider. Strawberry competed with 10 stock investors in South Korea.
Human investors picked any stocks they wanted but the parrot, using its beak, made random choices from balls representing 30 blue chips, including Samsung Electronics. "The outcome of our contest was amazing. Strawberry stood third with her investment return standing at 13.7%," Paxnet general manager Chung Yeon-Dae said.
Human investors averaged a 4.6% loss, with only 2 beating the parrot - one by 64.4% and one by 21.4%. The human investors mostly chose to trade shares of small and medium-sized firms. They each made an average of 190 trades over the 6 weeks. Organizers gave the parrot 7 chances to pick shares over the same period. "Our experiment proved that making long-term investments in blue chips is safe and effective," Chung said.
Originally posted at Carpe Diem.