It’s always fascinating to me when major magazine publications such as Money or Forbes issue their annual “Investor’s Guide” in the beginning of the year. Assuming that most investors rebalance their basket of stocks around the holiday season, let’s take a look at the predictions from Money Magazine for 2010 and see what investors would have made if they followed the advice.
There are two things to note in this observation. One is, at the time of this writing it is, October 6th, 2010. Not even a full year has gone by since these picks were made, so I am merely observing the progress year-to-date. And two, they cover nearly 200+ stocks, bonds and ETFs in the entire issue and to list them would be too tedious (for both reader and writer). So, I am simply including those picks with the most “conviction” – that’s when they feature fund managers who have done exceptionally well in the past year.
Top Picks From Top Pros
That’s the headline for the top five of 2009’s most successful funds. Now, let’s see how they do this year thus far.
| Bruce Berkowitz/Fairholme (FAIRX): | Money Magazine | Current Price | Gain/(Loss) % | Total Return | |
| Humana (HUM) | $42.04 | $50.50 | +20.01% | ||
| WellPoint (WLP) | $57.43 | $55.11 | -4.03% | ||
| Pfizer (PFE) | $18.32 | $17.24 | -5.89% | ||
| Forest Laboratories (FRX) | $31.19 | $31.31 | -0.38% | ||
| Total Return | +9.71% |
| David Herro/Oakmark International (OAKIX) | Money Magazine | Current Price | Gain/(Loss) % | Total Return | |
| Toyota (TM) | $83.42 | $71.25 | -14.58% | ||
| Richemont (CFR.VX) | $32.35 | $47.70 | +47.44% | ||
| Publicis Groupe (PUBGY) | $40.21 | *$49.70 | +23.60% | *Split Adjusted | |
| Total Return | +56.46% |
| Eric Ende/FPA Perennial (FPPFX) | Money Magazine | Current Price | Gain/(Loss) % | Total Return | |
| Varian Medical Sys. (VAR) | $46.07 | $61.81 | +34.17% | ||
| Signet Jewelers (SIG) | $24.78 | $32.62 | +31.64% | ||
| Total Return | +65.81% |
| Diane Jaffee/TCW Dividend Focused (TGIGX) | Money Magazine | Current Price | Gain/(Loss) % | Total Return | |
| Packaging Corp. (PKG) | $42.04 | $50.50 | +20.12% | ||
| J.P. Morgan (JPM) | $57.43 | $55.11 | -4.04% | ||
| Pfizer (PFE) | $18.32 | $17.24 | -5.89% | ||
| Total Return | +10.19% |
| John Rogers/Ariel Appreciation (CAAPX) | Money Magazine | Current Price | Gain/(Loss) % | Total Return | |
| CB Richard Ellis (CBG) | $12.05 | $18.03 | +49.62% | ||
| CBS (CBS) | $13.81 | $16.66 | +20.63% | ||
| McCormick (MKC) | $18.32 | $41.73 | +127.78% | ||
| Total Return | +198.03% |
Money Magazine’s Average Total Return: +68.04% Vs. S&P 500 Year-to-date: +2.341% (Wowza!)
Now, before you fire your stock broker to jump on these hot stocks, there are a few things you should know. These stocks are coming off of exceptional bottoms from the 2007/2008 housing collapse and have not yet surpassed their peak prices (with the exception of one or two on the list). While approximately 75% of the total stock market are currently in positive territory year-to-date, only a handful of them have reached back to their 2007 highs. Obviously, this is only a small sample of those stocks and may not necessarily suit your needs. But, aside from the technical details, a return of +68.04% in a year is extremely rare, if not impossible only because there are strong psychological forces at work that prevents from achieving that.
By the way, if you’re wondering, here are the figures for each funds’ five year annualized return.
Fairholme (FAIRX): +7.7%
Oakmark International (OAKIX): +6.6%
FPA Perennial (FPPFX): +2.1%
TCW Dividen Focused (TGIGX): -1.8%
Ariel Appreciation (CAAPX): +1.3%
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