One lunacy of Caps
Today I was looking at the red part of my scorecard, reviewing my losers. One thing that caught my attention was my MWA score of minus 30. Not that it's a bad business or anything, but for some reason the stock has chosen to go down. All right, I felt confident enough about MWA and saw no reason to cut and run. But then it occurred to me that I could cheat on the system by picking MWA-B to outperform (that would be Caps's equivalent of doubling down). Generally speaking, it's not honest, but since everybody else uses that trick, why should I put myself at a disadvantage? So I typed in MWA-B, selected outperform, and was about to leave the page when I noticed something strange. It was the star rating. Yes, while MWA was a 5-star stock, its sibling MWA-B had got only 4 stars from the Caps community. So let me get this straight: the class of shares that is equivalent to MWA in all respects except that it offers more voting power and is 6% cheaper is expected to underperform MWA? Does anybody seriously believe that paying a 6% premium for the same stock is the surest way to better investment returns? The Caps community says yes.