At the end of 2007, GuruFocus asked its members to share their single best idea for 2008. We received a total of 80 replies, among them, 21 stocks were recommended.
Thanks to everyone who ventured out and shared your investment ideas!
Now that we just closed a terrible year for stocks (aren’t you glad?), we would like to sum up how we did collectively as a group. Although investing is a never ending endeavor, it doesn’t end when the calendar year ends; we still want to reckon periodically to make sure that we are on the right track, and to make adjustment if necessary.
In tallying the performance, we assumed all stocks were bought at the beginning of 2008 and held through the end of the year.
To be fair, not all the investment ideas were presented at the beginning of the year. Some members nominated their stocks rather late into the year, when the stock prices were lower than the beginning of the year prices. That is Okay, for much of the performance (damage) has happened since September of 2008. Let’s not get too scientific about it.
Also, many members may have sold their nominated stock long before the end of the year; some may have even sold before September, 2008 when the significant market decline commenced. It doesn’t matter, none of you came out and withdrew your ideas. No real money was at stake here, so we can afford to make the assumption that you were actually recommending holding through the end of the year.
“What about dividend?” You may ask. Are you worrying about a few percentage points that dividends could contribute? I suggest we wait until some other year when the dividend may actually make a difference between beating the index or losing against the index. For that matter, I threw away the dividend yield of the benchmarking index S&P 500, currently is around 3.2%.
The performance of the 21 stocks is listed in the table at the end of this article.
The average performance of the 21 stocks recommended is -51.86%, far short of performance of the S&P 500 index , which lost 38.5% for the year.
The best of the “best ideas” was Odyssey Re Holdings Corp. (ORH, Financial), which was recommended by member crimreaper. ORH is a underwriter of reinsurance, its stock began the year at $36.84 and ended the year at $51.81, with a gain of 40.64%.
It is also the only stock that turned in a positive return among the 21 stocks recommended.
Way to go, crimreaper! We wish you bought a significant position in this stock. Why did you pick ORH? and more importantly, what is your call for 2009?
The worst performing stock was Strategic Resource(STACF), a Canadian mining company involved in the Zinc production. It is traded on pink sheet in the US. The stock was recommended based on a speculation that Zinc price would recover. Well, it didn’t, instead, it collapsed. Even though the company was able to start producing Zinc in April, 2008, it could not produce at a cost below the market price for Zinc. The company put the mines in care and maintenance mode back in October, 2008, waiting for another day. The stock tanked to $0.0025 per share.
Obviously, down 51.86% is not that good a performance to brag about. Is there anything good I can say about it? I can think of two: the first is that none of the stocks recommended went belly-up during the financial crisis. Congratulations, everyone! The second is, with the market down 38.5% and a group of stocks that are collectively down 51.33%, there might be stocks sold at deeper discount than the market itself. Hope some of us will go back to their original recommendation(s) and see if they want to stick to them. If you like them then, you may like them more now since they are so much cheaper.
Now that 2009 is upon us, we should go out and hunt more values. Whatever you find, please click here and share your best ideas for 2009.
Happy Investing in 2009!
(updated: Jan. 2, 2009)
Thanks to everyone who ventured out and shared your investment ideas!
Now that we just closed a terrible year for stocks (aren’t you glad?), we would like to sum up how we did collectively as a group. Although investing is a never ending endeavor, it doesn’t end when the calendar year ends; we still want to reckon periodically to make sure that we are on the right track, and to make adjustment if necessary.
In tallying the performance, we assumed all stocks were bought at the beginning of 2008 and held through the end of the year.
To be fair, not all the investment ideas were presented at the beginning of the year. Some members nominated their stocks rather late into the year, when the stock prices were lower than the beginning of the year prices. That is Okay, for much of the performance (damage) has happened since September of 2008. Let’s not get too scientific about it.
Also, many members may have sold their nominated stock long before the end of the year; some may have even sold before September, 2008 when the significant market decline commenced. It doesn’t matter, none of you came out and withdrew your ideas. No real money was at stake here, so we can afford to make the assumption that you were actually recommending holding through the end of the year.
“What about dividend?” You may ask. Are you worrying about a few percentage points that dividends could contribute? I suggest we wait until some other year when the dividend may actually make a difference between beating the index or losing against the index. For that matter, I threw away the dividend yield of the benchmarking index S&P 500, currently is around 3.2%.
The performance of the 21 stocks is listed in the table at the end of this article.
The average performance of the 21 stocks recommended is -51.86%, far short of performance of the S&P 500 index , which lost 38.5% for the year.
The best of the “best ideas” was Odyssey Re Holdings Corp. (ORH, Financial), which was recommended by member crimreaper. ORH is a underwriter of reinsurance, its stock began the year at $36.84 and ended the year at $51.81, with a gain of 40.64%.
It is also the only stock that turned in a positive return among the 21 stocks recommended.
Way to go, crimreaper! We wish you bought a significant position in this stock. Why did you pick ORH? and more importantly, what is your call for 2009?
The worst performing stock was Strategic Resource(STACF), a Canadian mining company involved in the Zinc production. It is traded on pink sheet in the US. The stock was recommended based on a speculation that Zinc price would recover. Well, it didn’t, instead, it collapsed. Even though the company was able to start producing Zinc in April, 2008, it could not produce at a cost below the market price for Zinc. The company put the mines in care and maintenance mode back in October, 2008, waiting for another day. The stock tanked to $0.0025 per share.
Obviously, down 51.86% is not that good a performance to brag about. Is there anything good I can say about it? I can think of two: the first is that none of the stocks recommended went belly-up during the financial crisis. Congratulations, everyone! The second is, with the market down 38.5% and a group of stocks that are collectively down 51.33%, there might be stocks sold at deeper discount than the market itself. Hope some of us will go back to their original recommendation(s) and see if they want to stick to them. If you like them then, you may like them more now since they are so much cheaper.
Now that 2009 is upon us, we should go out and hunt more values. Whatever you find, please click here and share your best ideas for 2009.
Happy Investing in 2009!
| Rank | Stock Symbol | Reason(s) for receommendation | Performance |
| 1 | ORH | N/A | 40.64% |
| 2 | BBT | Safe from the sub-prime/credit crunch mess | -11.65% |
| 3 | HD | N/A | -13.72% |
| 4 | ZNT | Many insider buys; healthy dividend | -28.41% |
| 5 | GW | Good risk/reward deal | -37.08% |
| 6 | BBSI | N/A | -39.44% |
| 7 | CSCO | Steady growth, best of breed, good profit margins, well managed | -40.86% |
| 8 | NTRI | N/A | -48.06% |
| 9 | NDAQ | Company made a healthy profit on the investment in LSE | -49.69% |
| 10 | AEO | Shows up on Greenblatts screen and is also a good company as defined by the moat qualification | -54.45% |
| 11 | SLM | From year-end close, these shares could easily be double or better during 2008 | -54.71% |
| 12 | GE | A mega cap with the ability to grow via acquisitions; can shed weaker performing units and add potential superior segments | -56.61% |
| 13 | HEM | Exploding biofuel markets, demand from BRIC | -61.00% |
| 14 | SU | Large reserve of oil; looks like it will keep going up forever | -64.61% |
| 15 | CX | Undervalued based on its ability to generate cash flow over the long term | -65.51% |
| 16 | EK | N/A | -70.19% |
| 17 | Mpel | Casinos going well | -73.09% |
| 18 | C | International operations doing well; receovering nicely | -77.08% |
| 19 | VCI | Margin expansion just starting, cheap on most value matrix | -88.77% |
| 20 | ABK | N/A | -94.82% |
| 21 | STACF | Everything will get better when zinc prices get up again | -99.93% |
| AVERAGE | -51.86% | ||
| S&P 500 | -38.50% |
(updated: Jan. 2, 2009)
