One quarter into 2012, and the market’s a far different place than we expected at the end of 2011. The major indices cruised through the first three months, financial stocks were partying — with Bank of America (NYSE:BAC) the unlikely belle of the ball — and high-yielding dividend stocks were shrugged off.
Well, a rising tide lifts all most boats, and many of us at InvestorPlace saw some of our stock and options picks yield pleasantly surprising returns early on. Still, not every decision was a gem, either. But after about three months of market action, it’s time to use the quarter’s end — in the spirit of disclosure — as an opportunity to reflect on some of the calls we’ve made thus far in 2012, for better or worse.
Here’s a look back at some of InvestorPlace’s calls from 2012:
InvestorPlace Assistant Editor Kyle Woodley:
Discover/Ralph Lauren, Micron/Joe’s Jeans
I recently professed my love for Discover Financial Services (NYSE:DFS), so I’ll keep this part short: DFS is up 40% since the beginning of the year (I projected 50% returns for all of 2012), and it still looks attractive on both growth and value bases.
As I mentioned in March’s look back, Ralph Lauren (NYSE:RL) is enjoying some decent gains since my late-January article. The problem is that growth is mostly the same — up 13% then and 15% now, having mostly plateaued since early February. Still, Ralph Lauren is more than doubling the S&P 500 at 28% gains year-to-date, so it’s hard to complain. But I’m at least curious to see what happens to this rut, especially if the markets go south.
Joe’s Jeans (NASDAQ:JOEZ) is the stock that won’t go away. I panned JOEZ because it failed to release earnings on time, and because it was in serious risk of delisting by the Nasdaq. In short, I believed even if Joe’s had plans for growth and expansion, investors would be better off avoidin it because of its risky nature. Joe’s Jeans has since doubled in value, keeping its head above the $1-per-share waters for weeks — no doubt to the delight of a number of readers who torched me for the call.
As a note, I also felt the same way about semiconductor stock Micron (NASDAQ:MU) — not that the company was particularly weak, but that it was better left to day traders. Up 12% since then, MU has slightly outperformed the S&P 500 (9%), but it’s been a rocky road there. Credit is due, though. The company has, in the short term, weathered the untimely death of CEO Steve Appleton.
Jim Woods: One Brick, One Swish, One Slam Dunk
As the NCAA men’s basketball tournament kicked off, I advised readers to check out three options plays that could score big for traders because of the March Madness event. Well, the tourney isn’t even over yet, but the moves in these three options have been huge.
One was the General Motors (NYSE:GM) Apr 2012 27.00 call. That option can be described in basketball terms as a “brick,” as it tumbled 79% from my March 14 article through March 27. Fortunately, that was the only brick of the group.
My other two picks were winners, with the CBS (NYSE:CBS) Apr 2012 32.00 call up a respectable 23% from March 14 to March 27. The real slam dunk, however, was the Coca-Cola (NYSE:KO) Apr 2012 72.50 call. That option ran up the score to the tune of a 368% gain in just under two weeks. Now that’s what I call a nothing-but-net options trade!
Tyler Craig: Gold Play Falls Flat
One of my worst picks of Q1 2012 was a vertical spread suggestion on the SPDR Gold Trust (NYSE:GLD). In “The Gold Rise is Back in Play,” I highlighted a bullish breakout in the resurgent commodity and recommended selling a March 165-160 put spread. Unfortunately, Uncle Ben decided to step in and temper expectations for additional quantitative easing during his testimony before Congress on Feb. 29.
On the back of Bernanke’s statements, gold experienced a mini-crash of sorts, falling 4% on the day and completely reversing the initial breakout and uptrend that served as my thesis for the suggested trade. With my original forecast rendered moot, the appropriate response would have been to simply take the loss and move on to greener pastures.
GLD has yet to recover from the Bernanke-induced drop. Until it reestablishes itself back above its 20-day moving average, I see little need to revisit the yellow metal with bullish plays.