I can’t say I am disapointed to see the quarter come to an end as I am back on top of the rankings, with a comfortable lead. Actually, I’ve been fortunate enough to have been leading most of the year but I did slip into 2nd place long enough to actually not be first in Q2.
Choosing picks for an entire year will always be quite a challenge as so many elements can change. As I have discussed in the past, if I were able to update my positions right now, I would probably get rid of at least 1. But overall, I’m quite satisfied with the return and obviously with the ranking. I do feel like I was less aggressive than many other participants, especially those that went into these categories:
Many different strategies can work and I guess it’s logical to be aggressive to try to win but I did try to go for positions that I believe not to have much downside risk. And while for example I thought oil was going to rebound, there was just too much uncertainty in the world to actually think about taking all 4 picks around oil. So I diversified in a way. Will it end up being enough to win? Tough to say but let’s say I prefer being in my position right now! Without further wait, here are the returns of my 4 stocks:
USO – +9.34% - Like many, I had imagined that if the world economy could fight its way out of the recession, oil would surely benefit and while it might not reach the levels of a year ago, it seemed like a safe bet to expect a rise in the price of the “blood of the world”. I’m a bit surprised oil did not pick up more steam but I’m confident with my position and do think it has more upsize in the remaining quarter. It also turned out to be a bit of a hedge against those other bloggers who took oil stocks (although those who did usually picked a few picks so probably would not have helped if oil had been up to 150$).
GLD – +14.25% – This was another fairly safe pick as I did believe that the uncertainty regarding the world economy would help take gold to new levels. As well, with all of the money that was pumped into the systems, many still regard inflation as a significant threat and gold seemed like a good bet in 2009. It has not proved as profitable as hoped but that is mainly because the stock markets have moved much higher and my two next bets were the ones that would really profit from a market recovery
Technology is probably the area I know most about and so I did choose two companies that I believed to be undervalued, Baidu (BIDU) and Ebay (EBAY):
EBAY – +69.13% – Ebay has been picked on for a few years now but 2008 was a very tough year for the stock and as I had wrote, I believed that most analysts were not picking up the value of Skype & Paypal when evaluating the stock. When the stock market recovered, Ebay decided to sell a majority portion of its Skype business, thus obviously “helping” investors notice how much the business was worth. Ebay even mentioned the idea it could sell Paypal. While that does not excite me very much in regards to Ebay’s long term future, these actions certainly do help Ebay’s current valuation.
BIDU – +199.13% – Out of all picks made by the bloggers, this is the winner so far! Bidu has nearly tripled as it continues to hold its ground against Google in China. It is now even thinking of expansion in Japan. One of the big reasons why I think Baidu had been undervalued was that many analysts believed that Baidu will end up having legal problems because of many of its activities. As I have written in the past, I think it’s important to remember that Baidu operates in a very different environment and for the moment, Chinese authorities have much bigger issues to worry about. At this point, I do not have many expectations for the 4th quarter for Baidu considering its already very impressive ride this year.
So these 4 picks give me a 73.05% return, here is the ranking so far. As other bloggers publish their articles, I will add links towards their analysis: