- Beardstown Ladies
The Beardstown Ladies were a group of older women who formed an
investment club , formally known as the Beardstown Business and Professional Women's Investment Club, inBeardstown, Illinois , USA.cite web
url = http://online.wsj.com/public/article/SB114596682916135186-_HV3IgzQzLBmKCXMfG0Dgd02fNA_20060517.html
title="Where Are They Now: The Beardstown Ladies"
last=Gongloff
first=Mark
date=2006-05-01
work=Wall Street Journal
accessdate=2007-09-09]Founded in
1983 , the group achieved fame for their stock market acumen, claiminginvestment returns of more than 23.4% per year from their inception through 1994. They received considerable attention in national media outlets, and authored a best-selling book, "The Beardstown Ladies' Common-Sense Investment Guide", following it up with four more books.In
1995 , personal finance counselor and best-selling author ("Personal Finance for Dummies", "Investing for Dummies")Eric Tyson wrote an article in the "San Francisco Chronicle " exposing the fact that this club did not have any documentation oraudit to back up their claimed investment returns.In 1998, an article in "Chicago" magazine asserted that the group's stated returns had included the new investments made by its members, and that when computed in conventional fashion, their annual
rate of return for 1984–1993 was actually 9.1%. This was considerably worse than the 14.9% return on theS&P 500 during the same period. Outside auditorPrice Waterhouse , hired by the club, confirmed the sub-par 9.1% annual rate for 1984–1993. The auditor also discovered the Beardstown Ladies' annualized return was 15.3% when all of 1983–1997 was included; this was better than the average stock fund at the time, but still worse than theS&P 500 return of 17.2% for the same period. [cite web
url=http://www.time.com/time/magazine/article/0,9171,988060,00.html
title="Jail the Beardstown Ladies!"
last=Kadlec
first=Daniel
date=1998-03-30
work=
accessdate=2007-09-09]This revelation led to a
class action lawsuit against their publisher (Hyperion, a division of Disney), which settled the case by offering to swap the books for other Hyperion books.As of 2006 , the club still exists and is still investing.References
External links
* [http://www.ifa.com/archives/articles/tyson_eric_1999_beware_the_claims_of_the_stock_picking_gurus.asp An article summarizing the inflated returns]
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