The Laser Portfolio

One illustration of the theory of efficient stock markets is the laser portfolio.  In an efficient market prices include everything known and relevant so that a consistent patterns of winners is not based on skill.  The laser portfolio was chosen by pure chance.  On Tuesday September 29, 2009, before the eyes of the class, randomness pointed at the following three stocks:

1. Kraft Foods (NYSE: KFT).  Trading @ $26.00 per share on Thursday October 1, 2009

Kraft Foods Inc., together with its subsidiaries, manufactures and markets packaged food products and grocery products worldwide. The company offers snacks, including cookies, crackers, salted snacks, and chocolate confectionary; beverages, including coffee, packaged juice drinks, and powdered beverages; cheese, including natural, process, and cream cheeses; and grocery, including spoonable and pourable dressings, condiments, and desserts. It also offers convenient meals, including primarily frozen pizza, packaged dinners, lunch combinations, and processed meats. Kraft Foods markets its products under various brand names, primarily including Kraft cheeses, dinners and dressings; Oscar Mayer meats; Philadelphia cream cheese; Maxwell House and Jacobs coffee; Nabisco cookies and crackers and its Oreo cookie brand; Milka chocolates; and LU biscuits. It sells its products to supermarket chains, wholesalers, super centers, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores, and other retail food outlets. The company was founded in 2000 and is based in Northfield, Illinois. Kraft Foods Inc. operates independently of Altria Group Inc. as of March 30, 2007.

2. Queenston Mining Co (OTC:QNMNF.PK) Trading @ $5.73 per share on Thursday October 1, 2009

Profile Not Available

3. Ultrashort Real Estate Proshares  (NYSE:SRS) @ $9.87 per share on Thursday October 1, 2009

The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Dow Jones U.S. Real Estate index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.