Barron's Roundtable Discussion: An Exciting Time to Pick Stocks

I rely on a variety of resources, including newsletters, blogs, and the mainstream media, to try and figure out what the future holds.

One publication that has always been helpful in this regard is Barron's, the investment weekly, which I've been reading for several decades. Among the features I enjoy are Alan Abelson's Up and Down Wall Street column and the Q&As with experts who, in many cases at least, seem to have been selected because they actually know what they are talking about (unlike many of those who are regularly quoted or profiled elsewhere).

What I especially look forward to, however, are the "Roundtable" issues, which feature articles drawn from moderated discussions between a select group of old hands, many of whom I respect a great deal.

Luckily enough (for those who don't subscribe, at least), the financial weekly seems to be running a promotion whereby some of the material from the January 10th issue, which includes the first installment of the Annual Roundtable discussion, is available for free to nonsubscribers (though I'm not sure how long that will last).

Anyway, here is an excerpt from the article, entitled "Hang on Tight!" which includes a welcome sampling of the always straight-shooting and thought-provoking insights of Marc Faber and Fred Hickey.

Our go-to group of investment experts sees tough times for the economy -- but good fortune for stockpickers.

ONCE UPON A TIME, WE LIVED IN A WORLD where asset-price inflation begat leverage, which begat more asset inflation, in a virtuous circle known as the great bull market. We bought bad art, good wine and vacation homes (many), and stocks "on the dips," which made us rich. And geniuses, of course.

Then the big, bad wolves -- greed and excess -- came and popped our bubble, and the markets', and all the pretty assets fell to earth. The fairy god-mother -- bearing a strange name for a godmother, Uncle Sam -- tried to clean up the mess with great gobs of money, but little success. The pain, suffering and deleveraging continued, inflation went bananas, everyone shopped at Wal-Mart (WMT) and the Hamptons returned to scrub and sand. And no one lived happily ever after -- except for incredibly savvy stockpickers -- at least for a good five years. And that, kids, was the story they told at this year's Barron's Roundtable.

Oh, yes, the details: "They" are the 10 investment experts depicted here, who sat down with the editors of Barron's in New York on Jan. 5 to make sense of the epochal events in the economy and financial markets in 2008, predict what will happen in 2009 and share their investment ideas for the new year, which so far looks much like the old. The day was rife with history lessons and warnings -- and optimism, too, that those who find bargains amid the rubble will reap rich rewards. Or, as Meryl Witmer nicely put it, "It is an exciting time to be a stockpicker."

In the first installment of the 2009 Roundtable, you'll find the unabridged version of our little tale, as well as some first-rate stock picks from Meryl and Fred Hickey. The rest of this illustrious crew will share their wit and wisdom in Installments 2 and 3.

Meryl, general partner at New York's Eagle Capital Management and a value investor in the Buffett mold, brought four names to the 'Table -- an aluminum producer, a utility and two financials, as if she needed to burnish her credentials as a thoughtful contrarian. Fred, who edits the High-Tech Strategist newsletter in Nashua, N.H., made a compelling case for Microsoft (MSFT) and gold.

Want the details? Please read on.

Comments

[Moon Kil Woong:]

We bought bad art, good wine and vacation homes (many), and stocks "on the dips," which made us rich.

I think this doesn't apply to "us" it applies to those select few who raped and pillaged the financial system at the cost of the rest of Americans for the past 8 years. Most ordinary folks watched inflation eat away at the core of their existence as real wages didn't rise substantively.

As for the idea that this is an exiting time, it is if you are a fund manager playing with other people's money or a banker who doesn't care about losing money because the government will give them an endless supply of money no matter how much they gamble.

If the great ideas from these folks are Microsoft, Wal-Mart, and gold I'd rather save my money and not subscribe to Barrons. Those picks are the most common investments known to man. 99.99% of all investors have at least one of these holdings. At least they didn't add McDonalds to round things out. What were they thinking...

Jan 12 08:20 AM

[Kaiser:]

A great ad for Barrons The round table has one of the worst scorecards in the last 2 years only not quite as bad as the stock service Barrons charges 800 dollars a year for

Jan 12 08:29 AM

[blonde molly:]

Michael, you've been negative on US stocks for years. It's obvious that you would pick a Faber article, who has also been as negative as you.

So what's new?

Jan 12 09:29 AM

[bobbobwhite:]

World turning events happen and these guys till spout the same old, same old once again? Trot out the usual suspects again, will you? They always work.

Anyone in a crisis like this one who tells others to follow the same herd of the past 50 years is not going to get any of my money. Incredible what some people will pay good cash money for, especially these days. Ah, the herd followers!

Jan 12 12:37 PM

[secmaven:]

When you read the whole round table article the realization sets in. These so called "experts" have nothing to say but say it sixteen different ways. What a pathetic discourse from people who earn seven figure salaries year after year on the cupidity of the stock buying public.

Jan 12 12:38 PM

[User 68127:]

Exactly right! They say nothing at all, but in a very complicated and (to an untrained reader) smart-sounding way! What about them, other than their carefully-crafted reputations, does the author "respect?"

Beware anyone who follows their "advice." They are talking their books and usually wrong to boot. If their picks work at all, it is usually just a short term bounce as impressionable readers stampede into their ideas.

Meryl is the notable exception. You could usually make a lot of money following her picks. Why? Because unlike most of the others, she is a bottom-up stock picker who utilizes extensive and well-thought-out research in making her picks. The rest of them mainly spout top-down mumbo-jumbo, or, in the case of AJC, just repeat the picks of their analysts.

Jan 12 03:11 PM

[Touva:]

I've been reading Barrons since college in the 1960s. And it has cost me hundreds of thousands following their "tips". Now I use it as a tool when looking for "shorts" that the Roundtable is touting.

Jan 12 08:50 PM