What to Expect From Wall Street Daily in 2012
A few weeks ago, I asked if you could think of a worse prediction in 2011 than Meredith Whitney’s call that a municipal bond collapse was imminent. We received almost no responses. I said “almost.”
Kevin S. wrote in, saying…
Thanks for all your hard work and excellent market insights, Louis. Much appreciated. There is one worse call than muni bonds that I vaguely remember. The occasion was when you proclaimed the end of gold and suggested some “double-short” investment vehicle for the bolder and more enlightened ones in your reading audience. Ooopsy.
Oopsy, indeed, Kevin. I did incorrectly predict a drop in gold prices. But that was way back in June of 2009, so I’m off the hook, right?
Of course, I’m not. And that’s exactly why I’m sharing his response.
I believe in being held accountable. And I accept that I can’t be right all of the time. No one can. If they tell you otherwise, they’re lying!
My job is to strive for perfection, understanding that anything remotely close makes us – or saves us – a ton of money.
After all, what would be the point of reading Wall Street Daily if we didn’t consistently provide you with timely, actionable and, ultimately, profitable investment insights?
With that in mind, I went back and reviewed all my predictions made here since we launched last April. Here’s what I found out…
More Winners Than Losers
Writing a daily investment e-letter means I get to put my neck out on the line an awful lot. That’s a reality I live with, not an excuse. And thankfully, my neck doesn’t deserve to be chopped off.
In 2011, I provided you with more winning insights than losing ones. Take a look.
I assumed a 25% trailing stop discipline. Why? Because no matter how strong our conviction, we should always employ a disciplined, exit strategy.
And lastly, I consolidated the results by natural groupings and averaged returns for all investments mentioned, instead of just cherry-picking the winners and excluding the losers.
What We Got Right
Here’s the fun part. A run-down of the predictions we got right…
In the spring, we said “The Biggest Opportunity of the Next Decade” would be the unlocking of trillions of dollars of value tied up in intellectual property or patents. And we put you onto companies like Motorola’s Mobility (NYSE: MMI) and InterDigital, Inc. (Nasdaq: IDCC) early enough to score windfall gains of more than 50% in both stocks.
We told you that U.S. Treasuries remained a safe investment, even in the face of a debt rating downgrade from Standard & Poor’s. Since that time, 20-year U.S. Treasuries gained 16%.
We correctly told you to “dump the euro” before the troubled currency dropped by about 10%.
We told you that U.S. dividend stocks were too attractive and investors would start flocking to shares of the strongest companies in this zero-yield world. They did in the final months of the year.
And we successfully debunked the IPO hype, instructing you to avoid offerings from Groupon (Nasdaq: GRPN) and most notably, ZipCar (Nasdaq: ZIP), which is down 49.5% from its first day closing price.
What I Got Wrong
Like I confessed, I won’t always be right. Here are a few of my more notable flubs for 2011…
When it comes to foreign stock markets, we accurately predicted tough times ahead for China. But totally got it wrong with South Korean stocks. I said they were too darn cheap. They got cheaper still.
On the heels of Warren Buffett’s investment, I declared that Bank of America (NYSE: BAC) was a screaming bargain, not a value trap. It proved to be the latter (for now). I think the stock could rally mightily in 2012.
I also incorrectly pegged Amdocs (NYSE: DOX) and AboveNet (NYSE: ABVT) as takeover targets. To date, no deals have been announced.
What to Expect in 2012
That’s a round up of our performance in 2011. So what should you expect in the coming year? Much of the same. More winners than losers. And accurate and truthful economic commentary, too,
You see, Wall Street Daily doesn’t just exist to churn out profitable investment ideas for you. We also created it to cut through the clutter, noise and sometimes outright lies on Wall Street.
Take our stance on a double-dip recession for the U.S. economy, for instance. Pundits almost universally believed our economy was doomed. But we ushered in proof after proof after proof to the contrary. To date, no recession has materialized.
Then there’s our truthful reporting on the residential real estate market. While everyone hoped for a rebound, we told you to expect prices to keep falling. And they did, dropping another 2.6% in 2011 so far. (Data for the S&P/Case-Schiller 20-city composite index is only available through October).
Bottom Line: Whether you’ve been with us since the start, or just recently joined the Wall Street Daily Nation, we look forward to earning your support and loyalty in 2012. And we’ll get right to it starting with tomorrow’s column.
Ahead of the tape,
Louis Basenese
Related Topics: Commodities, Currencies, Economy and Politics, Market Analysis, Myth Busting, Options Trading, Real Estate, Small Cap, Stocks, Tech and Innovation, Think Contrarian
I wouldn’t call IDCC a win unless you sold during the two month window where the stock was up. If you waited for the takeover you haven’t made a dime. Winners & losers aren’t determind over averages for the year.
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Louis Basenese Reply:
January 5th, 2012 at 9:13 am
As I mentioned in the article, I assumed a 25% trailing stop discipline. On June 26, when I wrote up IDCC it closed at $39.42. It then rallied to a high of $82.50 on July 21, which would have moved the trailing stop up to $61.86. That stop would have been triggered on August 15 for a gain of 56.9%. And I agree, winners and losers aren’t determined over averages. But I made over 50 specific recommendations and needed a more concise way to show the results instead of including a mile-long list in the article.
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Mr. Basenesse:
The problem comes in the “Timing” of the prediction. As an example, the “Gold Bugs” have been proclaiming the rise of gold & the collapse of the dollar since at least the early 80s. They are trumpeting their predictions based on the rise over the past 3 years. Of course they say nothing about the prior 25 years when their prediction didn’t come true.
You certainly may come back on BAC, but I appreciate you putting your time lines on the calls.
As is true in baseball, nobody bats 1.000.
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You forgot Canadian banks, I bought RY in December for $47 up 7.7% with a 4% div. coming…Nice call in 2011!
Thanks. Don
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in the fall of 2011 you recommended TEF and CEL …both have dropped since then..What is your suggestion now , hold or sell?
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Louis Basenese Reply:
January 9th, 2012 at 3:32 pm
I don’t believe in “trading” dividend stocks. They are meant to be held for longer periods of time, as long as nothing fundamentally changes with the company. And nothing’s fundamentally changed with TEF and CEL. I still consider both attractive dividend investments. Particularly for investors looking for exposure to international markets.
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Louis, FYI I shorted gold when you recommended to even though I wasn’t nearly so down on it as you. It did go down for a while. I sold as it started back up so I did make some money on that short.
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