Back in December, during the mostly volatile trading months that ended 2008, when I was approached to join this stock picking contest, I was quite unsure about how to play it. I usually do picks based on specific valuations that can be closed weeks later. But this time, our picks were for the entire 2009 year. Like the other competitors, I was to base my picks on what I expected for the year. Was it going to be a rally back to the 2007 levels or would it be more pain in the financial markets? You can see the post with my picks here.
Without further wait, here are the results for Q1, I am obviously very happy about my 1st place but also about being the only one in positive territory:
| Rank | ||
| 1 | IntelligentSpeculator | 4.33% |
| 2 | TheFinancialBlogger | -0.94% |
| 3 | FourPillars | -2.67% |
| 4 | MDJ | -2.96% |
| 5 | DividendGrowthInvestor | -8.27% |
| 6 | WildInvestor | -8.90% |
| 7 | Wheredoesallmymoneygo | -21.77% |
| 8 | ZachStocks | -24.19% |
| 9 | MyTradersJournal | -27.54% |
And the results of my 4 picks:
| Purchase Price | Current Price | Return | |
| GLD | 86.52 | 90.28 | 4.35% |
| USO | 33.1 | 29.05 | -12.24% |
| BIDU | 130.57 | 176.6 | 35.25% |
| EBAY | 13.96 | 12.56 | -10.03% |
Turns out that the first quarter saw a little bit of both. Overall the market is down with the S&P500 dropping from 903.25 to 796.08 (-11,86%) and I would say that played in my favor. I was a little surprised I must say at how aggressive the other picks were with lots of leveraged ETF’s, and small companies that would be bound to have a solid bounce back if the markets went along. But instead, I went for 2 broader picks as well as 2 companies I thought were clearly undervalued.
USO and GLD were clear plays on gold and on oil. I’d say that both picks were correct and I’m happy with the 4.35% return of GLD for Q1. What I had not anticipated was the contango effect’s drag on USO and its inability to match the return of oil over the first few months. I am hoping that does not keep up and that USO can pick up more steam in the upcoming quarters.
As for the internet plays, I seem to be clearly wrong on Ebay and still have trouble believing how low of a valuation it is getting, I really think the stock will bounce back unless a major player launches a competitor to Paypal, their online payment division. The stock is down 12,24% though which is not too far from the market’s return and something I can live with. The pick that has put me at the front so far is clearly Baidu(BIDU), the Chinese search engine that continues to dominate despite great efforts put forth by both Google and Yahoo. At the time, Baidu had just gotten slammed because of reports it was accepting advertising for “fake” pharmaceuticals. My opinion was that the markets had killed Baidu too much ignoring that the company operates in China, far from the much more severe US regulations. Even Google does things in China it would never dare doing in the US, it is just a different environment. The 35,25% return is obviously above my expectations and at this point, I’m hoping more out of Ebay than Baidu for the next 3 quarters….
Upcoming shortly will be reviews by other members of the contest, I will add links as they are published so stay tuned!
Just when you though that maybe ETF’s were perhaps starting to lose a bit of their “in” factor, a new class of ETF’s has been unveiled that could restart the whole trend. In Canada, “Betapro” ETF’s are high volume ETF’s that are usually 
Ok ok, maybe the question is not clear. Of course, Twitter will need a business model in the future. But how soon will that happen? Can Twitter go on for a few more months or years before actually trying to generate money? There has been a lot of speculation lately about possible ways that Twitter could use to generate money including a good one I read yesterday on the Wild Investor 
Have you been standing on the sidelines for the past 10 days? Sure you were probably proud a couple of weeks ago to say that your investment fund was all cash, but if that was the case, then I’m sorry to tell you that you have just missed the biggest 10 day return since 1938.
Last week, I had two trades go against me and I was hoping to be able to 
It wasn’t a good week for us in the markets, but we still had a good time looking over the web. Many interesting readings, here are a few of my favourites:
By most measures, Google is the internet giant and perhaps even the company that represents technology the most. And it seems like in every arena, Google is thriving and gaining market share not only through its great marketing, but also, quite simply because its products are generally of superior quality. The most obvious example is search, where Google has been the leader for years with the brightest and richest doing their best to catch up without any success to show for. Unless of course you consider slowing down your market share losses… And even in newer areas such as news and more importantly mobile, Google is gaining grounds on established rivals and looks about as unbeatable as Microsoft seemed a decade or so ago.
does have such a website in Orkut. But how many of you have actually heard of it? Sure, if you are located in Brazil or India, then you do know about it and perhaps have a profile. But with no offence, that is not exactly where the battled will be played out.
There have been rumors about Google being in discussions with Twitter for an acquisition, Google has politely said it was not shopping for now. Of course, in many ways, such a deal would not be surprising. 
Think about how Google purchased Youtube to instantly gain the lead in online video. But it is playing a dangerous games, as other rivals (including Facebook) could snap it before. And before you ask, Facebook is partially owned by Microsoft so its doubtful Google could do much if that happened. So it is surprising to see Google put up so little effort in social media despite it being snagged as the next big thing by many.
It’s official..US on road to socialism
But in the past few weeks, the US government has gotten on the road to invalidate contracts signed by AIG and has now asked GM CEO Rick Wagoner to resign. I’m not saying these were not the right picks, or that they were. But it is still interesting that the US government is now clearly calling shots in the insurance business as well as the US automakers. And with control over several big banks, it is becomming clear that the US government is calling some shots in that industry as well. And all of this happened in a matter of months. So let’s not try to imagine where it will get if things do not improve in the next few months.
Now many questions will arise from such a role of the government. First off, as these institutions become “political”, can the government actually let them fail? Or does it become too much of a political liability to have a “public failure” of a federal rescue? And also, when will the government actually step back and let the private sector take over? We all know that the government is generally far from effective compared to the private sector and that has been proved in the US more than anywhere else. But it is also known that once the government gets involved, it has a difficult time letting go and that is what I am personally more worried about.
The Obama administration has already been criticised for not coming up with enough clarity and answers… imagine what it will be when they will start writing insurance policies, designing new cars and developping new “green cars”. Oh and there are many, many companies waiting in line to be managed by Washington.. no end to this tunnel in sight.