Some time back in the 1990s, with middle age on the horizon and retirement planning suddenly on my mind, I began like most people to study the stock market, screening mutual funds for IRAs, etc. Somewhere along the way I stumbled across the Steadman Funds, hands down the worst mutual funds in the history of the universe. The record of the Steadman Funds was so bad that it had to be a joke, or some screwy scheme deliberately to lose money to create tax loses for people in very strange circumstances. Even the proverbial monkey throwing darts at the stock page would have done better. In the midst of one of the greatest bull markets in history in the late 1990s, the Steadman Funds turned in annual returns of -8% in 1993, -37% in 1994, -28% in 1995, -30% in 1996 and -28% in 1997 (all years in which the stock market rose). Expense ratios, typically around 1% for most funds, ran as high as 22 percent. Around the industry they were often known as the “Deadman Funds,” because only a corpse or someone in a coma could possibly keep their money there. (Sure enough, apparently many account holders were in fact deceased.) Needless to say, I stayed away from the Steadman Funds, though I used to look for their performance in the annual mutual fund ranking for the sheer comic relief.
I wondered a while ago whatever happened to the Steadman Funds. Turns out in the late 1990s the Steadman Funds became the Ameritor Funds, but they finally died in 2007, when the SEC noted that over the previous ten years the funds had lost 98.98% of their total value, turning a $10,000 investment into $102.
But this got me to thinking: just what does an investment specialist with the Steadman Funds do after crashing and burning in such a comprehensive fashion? I wonder if maybe they went to work for the Obama administration’s “green energy investment” program? I offer this as a possible explanation after seeing the news this week that yet another green energy company backed with over $100 million in taxpayer dollars has filed Chapter 11 bankruptcy. Ener1 Inc., a battery maker, has joined the ranks of Solyndra, Evergreen Solar, and Beacon Power in the Obama Administration’s Steadman-like portfolio of energy investment losers. More failures are thought to be in the pipeline, according to a recent CBS News report. If nothing else, after the Obama Administration is turned from office, maybe these green energy geniuses could reopen the Steadman Funds. At least they’d stop squandering taxpayer dollars.
Just to be clear for people who sometimes don’t get punch lines, I don’t literally think the Obama Administration hired the Steadman Fund’s hapless managers, but Obama is clearly delivering the Steadman Fund of presidencies.