Stock Picking: Art or Science?

Professional money management is without a doubt a big business. Men and women go to school for years to get advanced degrees in finance, economics, business administration and other areas. They make a good living at it, too: Witness the contributions of Wall Street to New York City's economy.

With all due respect to the industry, an Internet journalist is raising an interesting question: Does it matter? In his recent article, "When Hot Women Pick Stocks," Daniel Gross of Slate magazine highlights some recent instances of celebrity stock picking that outdoes the experts. The title of his article refers to a contest sponsored by Playboy magazine and TradingMarkets.com involving, well, Playboy playmates. (Important note: TradingMarkets will donate $50,000 to a charity selected by the winner.) The current leader is Amy McCarthy, whose portfolio of five stocks is up almost 10 percent. By comparison, the Standard & Poor's 500 is up just 2.5 percent for the year.

Gross isn't overly focused on the women. He also cites successes by Wayne Rogers, who played Trapper John on M*A*S*H and Lenny Dykstra, former major league baseball star.

The article recalls a recurring feature in the Wall Street Journal, which picked stocks by throwing a dart against a newspaper stock table. Over time in the Investment Dartboard, the dart throwers held their own against professional money managers, as this article indicates.

Gross finds a positive reason for the success of non-professionals: "The competent celebrity results suggest how the markets have, in some ways, become more efficient as they've become more democratized. If you removed the bylines from the musings of Dykstra and Rogers and laid them alongside comments made by six random mutual-fund managers, you wouldn't notice much of a difference."

Certain something to think about.