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Schaeffer: Guru of the Year
01/23/2004 12:00 am EST
Based on his decision to move into tech and gold last year, Bernie Schaeffer earned the "Guru of the Year" award for 2003 from columnist Aaron Task of TheStreet.com. Here are excerpts from that column and an overview of Bernie’s master portfolio.
"Hindsight being 20-20, we now know that the best strategy for 2003 would have been
one heavily weighted toward gold and technology, particularly the small-cap
variety," says Aaron Task in
"With impressive foresight, just such a portfolio was the
recommendation of Bernie Schaeffer heading into 2003. On the strength and
uniqueness of that call, he is this column's ‘Guru of the Year’ for 2003.
Schaeffer's bullishness on the tandem of tech and gold stocks ran afoul of conventional wisdom. Because of their experience in the 1990s, most investors came to believe there's an inverse relationship between tech stocks (and equities in general) and precious metals. But the Fed’s efforts to ‘reflate’ the economy have altered the relationship between the two groups, even if relatively few investors have realized it.
"Heading into 2004, Schaeffer maintains a heavy concentration in gold and tech shares, but ‘I'm not saying people should be invested up to their eyeballs,’ he said, expressing concern about technical resistance in the 2000-2200 area for the NASDAQ, longstanding bullishness in the Investors Intelligence survey, steady inflows into equity mutual funds, and a string of bullish magazine covers in the past six months. ‘It's a fairly risky environment and you need a significant cash reserve,’ he declared.
"Currently, Schaeffer recommends an allocation of 30% cash, 20% gold stocks, 30% tech stocks, and 20% in other equities, mainly international. Schaeffer's master portfolio includes positions in Newmont Mining (NEM NYSE), Coeur d’Alene Mines (CDE NYSE), and Bema Gold (BGO ASE). In tech, he owns Research in Motion (RIMM NASDAQ), Red Hat (RHAT NASDAQ) and recently initiated positions in Flextronics (FLEX NASDAQ) and XM Satellite Radio (XMSR NASDAQ). In an effort to ‘get more focused on tech as sector vs. getting cute on individual names,’ Schaeffer also owns the NASDAQ-100 Index (QQQ ASE). ‘When the lumbering herd finally decides to move into tech, that's where they'll go,’ he predicted."
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