Remember the Beardstown Ladies?

The Wall Street Journal does, and we can always use a reminder that investors in general, not just the pros, tend to fib about their stellar returns.

In 1983, when 16 Beardstown ladies, average age 70, started the Beardstown Business and Professional Women's Investment Club, they did so partly because they were sick of being told by men that they shouldn't worry their pretty heads about stock-buying and finance and such.

They weren't the world's first women's investment club. But they are arguably the most famous – not that you could have predicted that by watching them from the start. They were hardly throwing around LTCM money, after all; each member kicked in $100 of seed money and added another $25 a month thereafter. They invested in companies they knew. When Wal-Mart moved to town, they noticed its parking lots were always fuller than Kmart's, so they bought the stock. One member had a Medtronic pacemaker installed and bought the device maker's shares from her hospital bed the next day.

And they were successful. They were recognized as one of the National Association of Investors Corp.'s "All-Star Investment Clubs" for six years running. CBS put them on the "This Morning" show in 1991 and again the next year. In 1993, they were commissioned to make a video, "The Beardstown Ladies: Cooking Up Profits on Wall Street." That led to more TV appearances, which led to a book, published in 1994, called "The Beardstown Ladies' Common-Sense Investment Guide," which included stock-picking tips and recipes.

* * *

In fact, their publisher, Walt Disney's Hyperion, raised hopes that the average person could be very successful, indeed -- and that's how the trouble began. Their first book's jacket claimed the group had averaged 23.4% returns annually from 1984 to 1993, nearly double the Dow Jones Industrial Average's returns during the same period. But in 1998, Chicago magazine noticed that the group's returns included the fees the women paid every month. Without them, the returns dwindled to just 9%, underperforming the Dow. An article in the Wall Street Journal led the ladies to hire an outside auditor, which proved they had indeed misstated their returns.

The fall was abrupt. Time magazine (kiddingly) suggested they be jailed. Hyperion was sued and took the Ladies' books out of print. Four years ago, it settled the case by offering to swap any Beardstown book for other Hyperion titles, including "116 Ways to Spoil Your Dog," by Margaret Svete and "I'm Not Really Here," by comedian Tim Allen. Only used copies of the Ladies' books are available now, on Amazon.com and eBay, often for pennies.

Who did those ladies think they were, fibbing like that? Hedge-fund managers?