Washington’s Record as Investment Manager

by Frank Holmes, CEO, U.S. Global Investors | March 10, 2009

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Think the markets are kicking you around in 2009? Be thankful your portfolio isn’t performing like that of the federal government in its role as investor of last resort.

The Government Relief Index, created by the Nasdaq OMX to measure the performance of the 21 stocks that received at least $1 billion in emergency government funding, is down a whopping 58 percent.

And that’s just since January 5, when the index started.

This index, with the ticker QGRI, started with a value of 1,000 and on Friday it closed at 418.27. Below is the steep downhill chart.

By comparison, the S&P 500 Index is down 25.9 percent over the same 60 days, the Dow Jones Industrial Average 25.4 percent and the Nasdaq 20.4 percent.

Granted, the QGRI has a bit of a disadvantage compared to the other measures – it’s loaded with shares of banks, insurance companies and General Motors.

The worst-performing holding in the QGRI is Huntington Bancshares, down 86.7 percent since January 5, followed by Citigroup, down 84.7 percent. Bank of America and AIG are both off 77.7 percent.

A single stock in the QGRI is positive during the period – Morgan Stanley, which is up 7.1 percent. Northern Trust, down 9.1 percent, and Goldman Sachs, off 10.4 percent, are next.

Ford Motor Co. is looking all the better for not taking any emergency money from Washington. Its shares have declined 31 percent, roughly half of the slide experienced by General Motors, which is down 60 percent over the 60-day period.

 

Copyright © 2009 Frank Holmes
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Frank Holmes | CEO, U.S. Global Investors | San Antonio, TX USA | Email | Website

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