by Jeff Reeves | March 30, 2012 10:32 am
One of my biggest personal complaints about Wall Street is the lack of transparency or accountability, and the fact that “regular” investors have the deck stacked against them.
Fat cat CEOs get golden parachutes after running companies into the ground, big hedge funds have armies of researchers and can mess around with tactics like high-frequency trading trading and “dark pools” of securities … all while regular folks like you and me are just trying to make sure we can retire sometime before age 87 while holding down our day jobs.
So in the spirit of accountability and fairness, I try to regularly update readers on my performance — as honestly as I can. I rarely make short-term calls, so typically it takes some time for my advice to pass or fail. But hopefully after two or three months, the results will speak for themselves.
If I were to grade myself on my writing since December, I think I earn a solid B. Yes, the market has been in an updraft so stock picking has been easier – but a number of my calls outperformed dramatically, lapping the Dow two or three times over.
On the other hand, I hardly qualify for the top of the class. On the individual subject of short-side trading, I get a big fat F. I also made a few bonehead calls about the banking sector, which has been one of the biggest sources of gains in the recent rally.
Here is a comprehensive list of my writing, a little background and a link to the original post. I put the bad calls first too so I can’t be accused of hiding my stupidity.
How do you think I fared? Send me your feedback to email@example.com or roast me on Twitter @JeffReevesIP. You can also spout off in the comment section below.
12/16 – 5 Sure-Fire Shorts for 2012
On the plus side, Cabot Oil & Gas (NYSE:COG) is off 16% since this writing…but the other stocks all have actually outperformed the market. The biggest offender? Office Depot (NYSE:ODP) tacked on 66% since this column was published. That’s what you get for talking shorts amid a rip-roaring rally.
Soda Stream (NASDAQ:SODA) and Barnes & Noble (NYSE:BKS) are indeed slightly in the red. But Zagg Inc (NASDAQ:ZAGG)? Up almost 39%. More proof that it’s very difficult to short a rally.
The hits keep coming. The “best” call here is that Lilly (NYSE:LLY) is flat. Netflix (NASDAQ:NFLX) is up 25% since then, and Sears (NASDAQ:SHLD) has more than doubled – thanks in part to a short squeeze. I could try to weasel out of responsibility by saying I was just highlighting what other people were shorting … but the staggering wrongness of this article makes it hard to shirk blame.
Yeah, who would have wanted to own banks in Q1? JPMorgan Chase (NYSE:JPM) jumped 24% after this missive, Bank of America (NYSE:BAC) soared 40% and the broad Financial Select Sector SPDR ETF (NYSEARCA:XLF) doubled the market.
The banks listed here have outperformed the Dow, but certainly underperformed their domestic peers considering the breakneck run for U.S. financials. And commodities stocks Suncor Energy (NYSE:SU), Canadian Natural Resources (NYSE:CNQ) and Barrick Gold (NYSE:ABX) are all in the red.
I hope you learned by now that when I say short, you should probably buy… you could have made a pretty penny on the other side of these trades. The Dow is up 2% and all of these are up significantly more – LinkedIn (NYSE:LNKD) tacked on 22% since my bearish call.
Walt Disney (NYSE:DIS) stock is up almost 18% since this call, roughly double the broader Dow Jones Industrial Average.
Ford (NYSE:F) stock is up 16% since this call, vs. about 9% for the Dow Jones Industrial Average.
First Solar (NASDAQ:FSLR) is down over 40% since this call, with the Claymore/MAC Global Solar Index ETF (NYSEARCA:TAN) off over 10% despite the broader rally. At least I got one, sell-side call right…
I warned investors that the two red-hot dividend sectors of 2011 – utilities and tobacco – couldn’t keep up their success and would underperform in the months ahead. Since then the Utilities SPDR ETF (NYSE:XLU) is actually in the red despite the broad-based rally for the market, while Altria (NYSE:MO) and Reynolds American (NYSE:RAI) are flat.
Toyota (NYSE:TM) is up 34% since this call, about three times the performance of the Dow Jones.
12/30 – 10 Best Stocks for 2012
My call in Alcoa (NYSE:AA) has put me in the top five of our InvestorPlace.com stock-picking contest, with returns that have doubled the market in 2012.
The Dow is up 5% since then, and the least of these five picks is up 8%. Biggest winners are Priceline (NASDAQ:PCLN) and Apple (NASDAQ:AAPL), which are both up by over 40%.
The “worst” of this group has almost doubled the Dow Jones’ 4% return since this column was published. The highest flyer is Red Hat (NYSE:RHT), up 30% followed by Cognizant Technology (NASDAQ:CTSH) with a 20% gain.
The Dow is up a bit more than 2% since this column, and two of the picks admittedly are slightly in the red. But Cinemark (NYSE:CNK) has added almost 10%, Diebold (NYSE:DBD) has tacked on 16%, American Eagle (NYSE:AEO) has tacked on 25%. Not counting dividends, either.
Jeff Reeves is the editor of InvestorPlace.com, and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace?.com or follow him on Twitter via @JeffReevesIP. As of this writing, Jeff did not hold a position in any of the aforementioned securities.
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