1.10.2009

BARRONS ROUNDTABLE - NEVER MIND


The Barrons roundtable gathered a few days ago and the current issue has this years predictions- Meryl Witmer with an interesting observation-


"It is an exciting time to be a stockpicker."


How did Meryl do last year with her picks at the roundtable:


MHK- -39.8%


WHR -45.3%


AEO -50.6%


III.UK -71.8%


NFDS.UK -41.2%


FKI.UK +47.1% (acquired during the year)


Not sure if she sold stuff before it tanked or what - and one big flaw with the roundtable is that one gives there picks and then we revisit way down the road. Anyhow, if you bought and held her picks for the year - not so good.


Abbey Joseph Cohen:


How do you look at valuation, Abby?


Cohen: We use seven different models to evaluate the S&P 500, based on earnings, book value, cash flow and such. We also do detailed return-on-equity analysis. Using a composite of those models, we think fair value for the S&P 500 is somewhat above where the market stands now -- and we have one of the lowest earnings forecasts on Wall Street. We estimate the S&P will earn about $55 this year.


With all these models, why was your '08 forecast so far off?


Cohen: We anticipated a sluggish economy at the time of last year's Roundtable, but changed our forecast to a recession a few weeks later. We adjusted our S&P targets downward. We didn't see the liquidity crisis that developed in the summer.


OK SURE - YOU NAILED IT;


How did Abby do with here 2008 picks:


Ibiden (Japan) -74.5%


WMI +6.7%


ROH +21.2%


INTC -35.3%


XLNX -12.5%


One of the most interesting look backs is Bond King Bill Gross's picks from last year- check it out:


Van Kampen Select Sector Muni Trust -37.3%


Pimco Corporate Income Fund 6.2%


Pimco Corporate Opportunity Fund -17.6%


GM BONDS due July 2033 -56%


Ford BONDS due Jan 2032 -50%


Usually one doesnt here much from Gross other than macro stuff- but picking auto company bonds last year - a disaster.


Who did well with their 2008 picks?


Fred Hickey- :


GLD +1.6%


AEM -11.4%


FXY +19.5%


SHORT (PUTS) RIMM +60.7%


SHORT (PUTS) AMZN +42.2%


And his picks for 2009:


MSFT CDNS GDX AEM DBA FXI;


Some other quotes from Fred:


"The government can't cure a disease that has been more than a decade in the making. The U.S has built up gigantic financial imbalances, and debt levels the world has never seen. Massive increases in public debt and spending can't replace the lost private-sector debt and cutbacks in consumer spending, allowing us to go on our merry way. The stock market is experiencing a snap-back rally, similar to what we saw in 1930, after the Crash of 1929."


"The stock market has rallied about 20%, and could go up 40% or 50%, as the little bull market did. Then reality is going to set in -- the reality that the economy is terrible, the unemployment rate is going to rise, the Fed's policies are imprecise. The dollar could get killed sometime this year, causing all kinds of problems. We have a more protectionist Congress. Deficit spending is unlikely to work. In sum, we have a date with more traditional bear-market levels. You'll see the single-digit P/Es [price/earnings multiples] that were typical in 1982, '74 even 1930 and '32. The market will go down significantly, and then make a bottom."


"On to gold. You have to protect yourself against potential hyperinflation. All the central banks are printing money now. The bull market in gold was rather orderly for the first eight years. We haven't seen the blow-off phase you get in all bull markets. That's coming. In dollar terms, gold was up 5% or so last year. In Indian rupees it was up nearly 30%. The price of almost all other commodities collapsed. I own bullion, the gold ETF [ SPDR Gold Shares (GLD)], some gold stocks and coins. I couldn't get them as the year progressed because demand was so great."


And if you are curious, Gabelli had an awful year also based on his roundtable picks:


TVL -90.5%


GAP 78.5%


CBY -33.4%


DISH -66.9%


ENSI +8.8%


GPC -12.7%


VIV.FRANCE -23.6%


RI.FRANCE -32.1%


This is just the tip of the ice burg from the interviews- bottom line IMVHO - they don't make them own up to their calls - as they just give their outlook for this year - and last year - well never mind.

1 Comments:

Blogger David said...

Exactly. 2008 roundtable was just swept under the rug with no more than a "oh, it was a bad year for everyone...".

The accountability is really not there in the latest Barron's coverage.

There were a lot of unbelievably stupid comments from some of the participants on the perceived "need" for bailouts and why last year's picks are no big deal. Common thread there seems to be a disregard for OTHER people's money...

7:27 PM  

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