My 8 Value Plays for '08: The Results

To review: Here were my 8 picks for '08: Final results, call it a 1.5 out of 8...

1.Sherwin Williams (SHW) gets a bid from a potential buyer

Not yet......although I still think in 2009 this will happen...

2. The US WILL NOT slip into recession

We do not know for sure if we technically will have until sometime in January (2 consecutive Qs of negative GDP growth). I think one would have to be foolishly optimistic to think we avoided it though.

3. Citigroup (C) does not cut its dividend and does not break itself up.

ERRR. Citi cut it dividend on Jan 15th and again in October. It did not , however, break itself up... although it should...

4. Google (GOOG) purchases Sprint (S).

Rumors abounded but nothing came of them

5. Dow in June 2008, 13,600. In December 2008, 15,200

In May it hit a post-prediction high of 13,058 before retreating back into the 12,000's. Then.....oh never mind...

6. Oil crosses $100 in January and does not retreat below it. By December 2008, it sits at $135

Well, this was right in that on Jan. 2nd, oil did, if ever so briefly, hit $100 a barrel. It did retreat below it hitting $90 the same month. By early April the price hit $120. In May it reached $133. By October with recession fears and margin calls abounding, it hit $75 and fell into the $60s by the end of the month. In December oil ended in the $40 range.

7. Apple's (AAPL) iPhone does not sell 10 million units before the end of 2008 without another price cut to $299.

This summer Apple indeed cut the price as sales slowed to a crawl...to $199.

8. President Mitt Romney is elected, saving all investors from a catastrophic tax increase.

Mitt dropped out of the race on Feb. 9th, ending what would have been an investor's dream. Barack Obama was elected the 44th President.

Disclosure: Long Citigroup, Sherwin Williams.

Comments

[BxCapricorn:]

You must be kidding with number 2. To even debate the fact that we have been in a recession since December 2007 is the height of self-deception. Why does the "R" word scare those with a grasp of economics?

www.businessweek.com/m...

Only a few of the 54 economists in Dec. 2007 (see link) thought we would have a recession, and of those, neither thought it would last more than the required two quarters. Was it so hard to accept the fact that the World leveraged $20T into $63T from 2002 to Dec. 2007, through the clever use of smoke and mirrors, and that it could be sustained? While I personally believe the Austrian School (i.e. Peter Schiff) is both right and wrong about 2009, the Wall Street Kool-Aid drinkers, to which you appear to belong, have given them more credence than they ever should have, due to your camp's repeatedly misguided "rah rah" mantras.

The others, well, Nostradamus you're not. I appreciate the attempt, but you should accept the fact that you are biased towards certain realities that do not exist. Case in point being your Citigroup recommendation at $26.

2008 Dec 26 07:47 PM

[logicalthought:]

Those are some of the worst, most inaccurate predictions I've ever seen, but at least I give you credit for not hiding from them, unlike some of the schmucks on this site who never fail to mention the few times they were right about something while ignoring or downplaying all the times they were wrong.

2008 Dec 26 11:59 PM

[punk_ash:]

Bravo for showing how screwed up your predictions were, but you were no worse than the most and they are in fact hiding their predictions and on top of that, they are changing their stories...

2008 Dec 27 04:20 AM

[James Wilson:]

When you strip away the enforcement of laws and regualtions for 8 years the Business Community goes nuts thinking they own the whole country. Take that and the lies about Unemployment, reasons to go to war , and the lies about how limited Oil is in the world and then you get this crappy economic crisis.

Hey I got and Idea why don't we let every business tell the consumer just how limited supplys are like we do Big Oil. Think any of them will state an overage to keep pirces low. Or would they be preaching shortage to get prices up and profits up ?

2008 Dec 27 08:02 AM

[Sailorman:]

You should give up predicting!!!

2008 Dec 27 08:37 AM

[long_on_oil:]

I love this article, because it just shows that in the end most of us have no idea what we are talking about. It is always fun to guess where the dow will be at year end based on past charting activity but the events of 2008 made the charts obsolete. It is all about cycles, crooked financial managers, over priced housing, increase liquidity, decrease liquidity, inflation, deflation, Throw it all together and it's enough to give an investor a migraine.
Here is my prediction: I predict you won't be much better predicting 2009 than you were with 2008...lol

2008 Dec 27 09:06 AM

[De Graaf:]

gHo-gHo-gHo-Gold is wat you need.

If you'd put your money where your mouth's at, you be living with pops and moms in no-time Sullivan.

Don't come to me saying that nobody could ever predict this crisis in 2008. There were few savvy minds like Peter Schiff and Nouriel Roubini who had to minerals, but the rest of Pundit America is just one-big-fake popularity show.

This summary of 'value plays 2008' deserves credit for showing your upmost incompetence just like the pundits on Fox. Utterly incompetent considering 'value' plays are not realised in one year. Value is unlocked in the long run. So I would recommend to face reality and get a real job.

What a prank.

2008 Dec 27 10:03 AM

[Brad Castro:]

Wow - you're brave for coming clean. I think I'd only give you 1 point for the Apple call. I don't see where you get another half point. In fairness, I doubt many people would've done much better predicting '08.

Here are my two predictions for '09. At some point, PFE will trade above $20/share and USB will trade above $30/share. It may only be intraday and only for a few seconds, but there you go--I'm putting it on the line.

2008 Dec 27 10:04 AM

[Leser:]

That was a noble thing to do, letting your deadly predicitons be the corpse we get to dissect in order to analyze the errors of our investing ways! From this article let's learn once again neither to predict nor to give full credence to predictions.
Making more generalized comments which analyze trends is one thing. However, making specific predictions which might potentially mislead investors is another. Who knows who might read such advice lacking experience and would invest inappropriately because of a specific but erroneous prediction? Well, that's inappropriate. Wouldn't you say?
Nonetheless, if you must make assumptions about future results, as anticipating the future is an inherent part of the investment process, add the requisite caveats, so the other possibilities of each scenario are sufficiently alluded to.

2008 Dec 27 10:44 AM

[G.Kelly:]

That's O.K... Appreciate your honesty. And, yes, you SHOULD give up on predicting. Or at least publishing them. However, in all fairness, very few "analysts" stood on the beach of hard facts while the rest of the world went up for the balloon ride. Of those that did "stay behind", the ones that I appreciate are those that, today, do not gloat or chastise. The "I told you so" group gets old very quick, and their exhaust clouds the air of possible repairs and changes required.
I like to remember that America is not JUST the economy, and that the "recovery" required is not JUST to the stock market.

An era has ended. How it is defined, were WE go from here, how WE move off the cycle, bubble-based economy that we have created....will depend, in part, on how "deep" WE choose to look at ourselves, and how fearless we are about our personal choices. WE cannot go back to what was.

Quite a challenge, imo.

My personal porfolio: Long on DIG, Gold ETFs. X, Nano/Stem cell pharmas, Alt. Energy, (solar,wind, fuel cell).






.

2008 Dec 27 10:54 AM

[jackooo:]

LOL LOL Imagine the mutual fund people that charge you every year to invest your money! They know absoleutley nothing but many American citizens give them their hard earned money to invest. lol lol

2008 Dec 27 11:28 AM

[pelican:]

I applaud you for at least publishing the results of your predictions. Even during less turbulent years most get it wrong. And many who do get it right have been saying similar things for years during which time they were getting it wrong. I would like to see those who gave us table-pounding predictions (Tom Brown comes to mind) do the same thing you did and publish final results.

2008 Dec 27 11:32 AM

[notsosmart:]

how can anybody,with or without agendas,get anything right when you have crooks,scoundrels & scammers so called legally phony rating almost worhless crap as AAA??? madoff is a piker compared to this ponzi now being bailed out by our tax $s.

2008 Dec 27 11:49 AM

[russ:]

Thank goodness you were wrong about Romney being elected, as with most things. However, credit to you for exposing your predictionns.

2008 Dec 27 12:11 PM

[doc_hawkins:]

Well you did better than myself and probabaly better than the tabloids where Elvis returned and was elected President. Good honest read. thanks.

Keep it up. You got more guts than most whom hide after their predictions do worse.

2008 Dec 27 12:49 PM

[RAC:]

Gutsy showing the predictions: such admission deserves
respect for integrity

2008 Dec 27 03:31 PM

[Urbane Gori...:]

Thanks for the honesty.... All authors should recap their wind and losses. Wouldn't it be nice if politicians came clean too... Happy Kwanzaa!!!

jegan ;-)

2008 Dec 27 03:46 PM

[henarl:]

No clue for you. You must be pretty blue. Oh well, me too..

2008 Dec 27 05:13 PM

[El Diablo:]

What mountainous planet is Todd living on to even think #2 and #3 would play out? As a "value investor" you should have known (along with the other schmuck ecomonists) about the possible dominoe effect a subprime mortgage crisis could have on financial institutions. As far as Citigroup, did you even question if they had subprime loans on their books? The dividend cut was inevitable.

2008 Dec 28 12:01 AM

[Mr. Twigs:]

Hmm, You are not ready to predict economic vectors. Back up a notch and practice "rock, scissors, paper". Once you find yourself move back into the economic arena.

2008 Dec 28 02:20 AM

[auto44:]

It is true that there are very few managers of money that are worth their price and lose more than gain even in the best of times. There are however some very brilliant managers who make lots of money for their funds. Most of these men have also been bashed in this economy, give them the long view and they will emerge again big time. To bash this writer because he made some predictions and then was man enough to discuss them is in my opinion less than fair. As for newbee investors being led astray they better get used to it. That's life. No matter what you undertake in life you will always recieve more bad information than good.Some given to you innocently, some given to you to use you as a dupe. I still find most financial information opaque enough to make investing chancy, choices are the responsibility of the individual investor, fraud is the responcability of regulation. Bull markets make us all look brilliant. Bear markets make most of us look stupid. Best chance, don't play in bear markets.


On Dec 27 11:28 AM jackooo wrote:

> LOL LOL Imagine the mutual fund people that charge you every year
> to invest your money! They know absoleutley nothing but many American
> citizens give them their hard earned money to invest. lol lol

2008 Dec 28 09:08 AM

[auto44:]

Easy to know it all at the end of the year!!!!!!!!!!!!!!!!


On Dec 28 12:01 AM El Diablo wrote:

> What mountainous planet is Todd living on to even think #2 and #3
> would play out? As a "value investor" you should have known (along
> with the other schmuck ecomonists) about the possible dominoe effect
> a subprime mortgage crisis could have on financial institutions.
> As far as Citigroup, did you even question if they had subprime loans
> on their books? The dividend cut was inevitable.

2008 Dec 28 09:14 AM

[auto44:]

Another year end Genius know it all!!!!!!!!!!!111


On Dec 28 02:20 AM Mr. Twigs wrote:

> Hmm, You are not ready to predict economic vectors. Back up a notch
> and practice "rock, scissors, paper". Once you find yourself move
> back into the economic arena.

2008 Dec 28 09:15 AM

[petetoth:]

Kudos on the gumption...like I said in the 2009 forecast, you're an optimist - God bless you!

2008 Dec 29 09:22 AM