Some analysts are making the case that it’s time to look outside the U.S. at stocks in non-U.S...
01/17/2008 12:00 am EST
January 17, 2008
The Hollywood writers' strike may scuttle the Oscars, the Grammys, and the Golden Globes, but here at MoneyShow.com, the show must go on.
Last year we asked eight leading investment advisers to predict which way the market would go in 2007 and to name their favorite stocks. Today we announce the winner-and reveal what our gurus like this year, too.
Our panelists predicted the 2007 high, low, and closing price for the Dow Jones Industrial Average and Standard & Poor's 500 index and picked one or two of their favorite stocks.
So, the envelope, please.
Our Guru of the Year award goes to Sam Stovall. Standard & Poor's chief investment strategist had the best combination of acute market predictions and winning stock picks.
Here are Sam's predictions and how they compare with the actual results:
As you can see from this table, John Dessauer of John Dessauer Investments was slightly closer on some of his market predictions, and Michael Murphy of New World Investor had the single best stock pick-eResearch, up 75% in 2007. But Sam's outstanding market call and selection of AU Optronics (up 42%) and Bayer (up 56%) made him the all-around winner.
Sam will get a real trophy at next month's World Money Show in Orlando (as will Randall Eley of the Edgar Lomax Fund, for his stock picks at last year's show), and we offer him our warmest congratulations.
So, what have you done for us lately?
Just kidding. But prognosticators are only as good as their last prediction, so it's time to unveil what our panel is looking for in 2008.
Many of last year's gurus return this year (Joe Battipaglia, Michael Murphy, Louis Navellier, and Bernie Schaeffer, as well as Sam). We also have several new participants who are popular speakers at Money Shows and whose recommendations are often featured in Top Pros' Top Picks: John Christy, Roger Conrad, Mark Leibovit, Bryan Perry, and Alec Young.
MoneyShow.com Top Pros' Predictions and Top Picks for 2008
|DJIA||DJIA||DJIA||S&P 500||S&P 500||S&P 500||Favorite Market||Favorite Stocks|
|Name||Company||High 2008||Low 2008||Close 2008||High 2008||Low 2008||Close 2008||or ETFs||Ticker|
|Joe Battipaglia||Stifel Nicholas||14200||11600||13800||1575||1280||1530||Brazil||eBay||EBAY|
|John Christy||Forbes Intl. Investment Report||15500||12000||14750||1700||1330||1650||Brazil||iShares MSCI Brazil index||EWZ|
|LM Ericsson Telephone||ERIC|
|Roger Conrad||Canadian Edge, Utility Forecaster||14000||10000||14000||1500||1000||1500||India||Verizon||VZ|
|Howard Gold||MoneyShow.com||14500||11400||13600||1580||1250||1480||Taiwan||Dolby Labs||DLB|
|Mark Leibovit||VRTrader.com||15000||11000||13000||1625||1310||1490||Vietnam||BEA Systems||BEAS|
|Constellation Energy Group||CEG|
|US Oil (short)||USO|
|Michael Murphy||New World Investor||14503||11990||14503||1607||1326||1607||China||TowerStream||TWER|
|Louis Navellier||Navellier & Associates||15781||13126||1786||1462||Brazil||Apple||AAPL|
|Bryan Perry||The 25% Cash Machine||15000||12700||15000||1600||1400||1600||Vietnam||MSCI||MXB|
|Bernie Schaeffer||Schaeffer's Investment Research||15300||12750||15300||1700||1425||1700||South Korea||Amazon.com||AMZN|
|Sam Stovall||Standard & Poor's||14100||11600||14100||1560||1275||1560||US||Career Education||CECO|
|Alec Young||Standard & Poor's||1698||1429||1650||Emerging Markets||Manitowoc||MTW|
As you can see from the above table, quite a few are surprisingly bullish. Nearly half expect the Dow to top 15,000 in 2008, and several are looking for the S&P to approach or surpass 1700. On the down side several look for the Dow to fall below its current levels around 12500 (the survey was circulated before the recent market selloff), but nearly everyone expects the indexes to bounce back nicely by year-end.
This year, in light of heightened interest in global investing, we added a new question: Which world market would be the best performer in 2008? Last year's top performer, Brazil, got the most support, followed by China and Vietnam. Nearly all the panelists expect the emerging markets boom to continue-seven of their favorite markets were in Asia-although Sam Stovall actually picked the US to lead the pack.
The panelists' top "stocks" were all over the planet, ranging from country funds to household-name technology plays to the kind of industrial companies that have set the pace over the last few years.
Joe Battipaglia and Bernie Schaeffer each chose one of the 1990s Four Horsemen of the Internet: Joe likes eBay (NASDAQ: EBAY) and Bernie picked Amazon.com (NASDAQ: AMZN), which more than doubled last year. Louis Navellier tapped supernova Apple (NASDAQ: AAPL), which has sold off sharply from a recent all-time high near $200. (Its gains matched Amazon's in 2007.) Navellier also likes Southern Copper (NYSE: PCU), an Arizona-based company which operates copper mines in Peru.
Michael Murphy favors two technology-focused growth companies, one in wireless and one in health care. TowerStream (NASDAQ: TWER) is the "leader in US metro WiMAX services, in eight cities now, 15 to 20 by the end of the year," he writes. "[It offers a] T-1 connection for half the price of the phone company [and] better reliability."
He also favors Rochester Medical (NASDAQ: ROCM), maker of antimicrobial urinary catheters, which he believes could benefit from changes in Medicare reimbursements and the resolution of an antitrust suit.
Alec Young, S&P's international equity strategist (whose market predictions are his own, not S&P's), likes Manitowoc (NYSE: MTW), a diversified industrial company he says will see sales and margins grow "as the use of MTW's crane products continues to increase in emerging markets," according to S&P.
Sam Stovall favors Career Education (NASDAQ: CECO), a for-profit education services company that's going through a turnaround, and Psychiatric Solutions (NASDAQ: PSYS), which runs in-patient psychiatric facilities and acquired Horizon Health last year.
A new addition, John H. Christy III of Forbes International Investment Report, likes Swedish telecom equipment maker LM Ericsson (NASDAQ: ERIC), which he believes "will continue to benefit from booming global growth in mobile phone usage."
Another newcomer-but hardly a rookie for MoneyShow.com users and Money Show attendees-Roger Conrad sticks with the telecom and utilities theme. He recommends Verizon Communications (NYSE: VZ), which appears to have a hit with its new high-speed FIOS (fiber optic service) video and Internet offering.
He also likes utility Duke Energy (NYSE: DUK) as an alternative-energy play, of all things. Its $2-billion, 630-megawatt (MW) integrated gasification combined cycle plant, slated for completion in 2012, will "produce four times the power and 45 percent less carbon per unit as the plant it replaces," Conrad writes.
Mark Leibovit, a technically oriented adviser who runs VRTrader.com, picks another utility, Constellation Energy Group (NYSE: CEG). He already has a winner in BEA Systems (NASDAQ: BEAS), which agreed to be purchased by Oracle (NASDAQ: ORCL) Wednesday. The stock jumped 19% in one day.
Leibovit also is short the US Oil Fund (AMEX: USO), an ETF tied to the price of crude. Presumably he expects oil to sell off in coming months.
Bryan Perry, editor of the 25% Cash Machine, recommends the India Fund (NYSE: IFN), in a bet the Bombay market juggernaut will keep rolling. He also likes MSCI (NYSE: MXB), which provides indexes and risk-analytic tools to financial institutions. Sounds like there should be plenty of demand on Wall Street for that!
I'm also joining in with my own predictions, although as editor I recuse myself from getting any trophies. (I'd have to win first, of course-no mean feat with this elite crowd.) I'm picking Taiwan as my favorite market, because the recent election should ensure political stability and stronger ties with Beijing.
I usually don't pick stocks, but this year I'm recommending Dolby Laboratories (NYSE: DLB), whose surround-sound technologies are everywhere from movies to home theaters to the new IMAX 3D, which helped give the stock a nice boost last year.
That's it for now: ten leading advisers and one editor, putting ourselves on the line in predicting the future. Let's hope it turns out better than the recent past.
Howard R. Gold is executive editor of MoneyShow.com. The opinions expressed here are his own and are not necessarily the views of InterShow.
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