I'll start with a Recap of my picks from last year and how they did, from the time that I posted the picks..

1/11/2006
STX closed at 22.85 on 1/11. Closed at 26.50 on 12/29. 15.9%
AKAM closed at 22.92 on 1/11. Closed at 53.12 on 12/29. 131%

4/14/2006
TIE closed at 27.16 on 4/14 (split adjusted). I called $40 by the end of CY06. Closed at 29.51 on 12/29. 8.6%
*I still feel that TIE is undervalued and own TIE.

4/26/06
TRID closed at $30.12 on 4/24, and closed at 18.18 on 12/29 for a loss of 39.6%. I own TRID, but it was all purchased after the massive dropoff (19.32).

8/28/06
T closed at 30.65 on 8/28, and closed at 35.75 on 12/29 for a 16.6% gain.

9/23/06
SNY closed at 43.95 on 9/23 and closed at 46.17 on 12/29 for a 5% gain

After that I got busy, and don't think

11/14/06
ILMN closed at 39.67 on 11/14 and 39.31 on 12/29 for a 0.9% loss

Posted by another user on 7/13/2006, not trying to call anyone out, just funny how things work out.

Quote :

"i sold all my cisco shares just under 22. it was up there around may. csco runs in the 18-22 range . sometimes it'll pop or dip around those levels if you watch it close enough. definately not worth my time anymore"

And my first pick for 2007 is AAPL, here's my post from the 2006 thread:

Quote :

"They're leading the way in content delivery, already owning the market in digital music, as well as being the first and biggest player in digital video downloads. They are well positioned to take over the role of becoming the king of all media (sorry Howard, you're obsolete). I think their I-Pod related growth is nearly squeezed dry, so AAPL will have to get profitable in the digital media market quickly to maintain/accelerate their current growth. AAPL is also slowly gaining market share in the laptop/desktop market as well, but I doubt it will significantly affect their bottom line in the near term."

1/1/2007 10:08:32 AM

gonna be an interesting year. lots of differing predictions (as always), but they are extreme in that the bears are calling a recession and the bulls are looking at another year of double digit growth.

i'm gonna stick with the 2006 picks: long oil, long old/fat people, short google

1/1/2007 2:14:47 PM

[Edited on January 1, 2007 at 4:11 PM. Reason : ]

1/1/2007 4:10:24 PM

Any predictions for China? I looked at FXI as a joke at the end of November thinking, bah too good, a correction must be near. But 1mo ~ 20% return...

1/1/2007 7:47:08 PM

CHINA

INDIA

put your money there.

1/1/2007 7:51:14 PM

emerging markets and very large recent gains
=
reluctant

1/1/2007 7:54:26 PM

chinese and indian ecenomies expected to grow by 8-10% each per year for the next 3-5 years (already grew by that much for the past 2 years).

1/1/2007 7:56:15 PM

^Doesn't translate into stock gains after currency fluctuations.

Do you have any picks in those areas, or are you recommending broad-based indices?

1/1/2007 10:18:57 PM

I have a bold prediction.


If you buy an index fund in '07. And sell it in in 2027. It will have gone up.

1/2/2007 12:59:47 AM

^I have a bold question...

With the appropriate time spent actively managing my portfolio, will it outperform the index by 2027?

PERHAPS

1/2/2007 1:19:34 AM

^ After fees, taxes, etc i highly doubt it.

And if it does beat it, you probably just got lucky...

1/2/2007 2:34:35 AM

Quote :

"Do you have any picks in those areas, or are you recommending broad-based indices?"

i haven't gotten into stocks yet on my own.

i have put money in mutual funds investing in those countries.

1/2/2007 6:15:49 AM

I want to be on page one...when its december of 2007, i wonder how many pages this will be.

1/2/2007 7:21:08 AM

Should probably go in the 2006 thread, but why not?

This is the first year ive had a 401k contribution for december.

As for the Dec. 29th paycheck contribution, the fund purchases were not executed on the 29th, but rather will be executed at market open tommorow. This will still go against 2006 purchases and investments instead of 2007 correct? will the fund manager manage the documentation, or is it something I have to keep track of in my own tax records? (Merrill Lynch)

Thanks guys

1/2/2007 10:00:03 AM

Quote :

"i have put money in mutual funds investing in those countries."

Do you have any recommendations?

1/2/2007 11:16:33 AM

^ I'm into FXI and IFN

1/2/2007 11:30:09 AM

FXI is an ETF and IFN is a closed end fund (meaning the net asset value does not directly represent the market price of the security)

considering the run up in the past year - epecially the past few months, it seems intuitive that the emerging markets will take a bit of a breather early-mid this year; and that might be a good time to get in. its hard to say when exactly that time may be.

1/2/2007 11:38:45 AM

IFN looks very impressive.. Will the securities be in $s rather than Indian Rupees? Does the currency valuation factor into % gain?

1/2/2007 11:59:51 AM

Quote :

"^ After fees, taxes, etc i highly doubt it. And if it does beat it, you probably just got lucky... "

Yes yes, I do like the idea of indexing and I think it makes a good amount of sense.

Maybe these comparisons do not take into account dollar cost averaging, timing, diversification, etc. But, I have yet to hear the answer to the two following issues in support of indexing...

Explain how individuals and a percentage of mutual funds beat their indexes every year. Yes, there are even ones who have beat it consistently.

Indexes are not picked by some oracle or stock god. They, too, are picked by companies based on data, past performance, analysis, etc.

High fees are bad, but under 1% ER and/or selecting your own stocks eliminates that issue.

1/2/2007 12:27:37 PM

IFN trades here, but its assets are Indian securities that may or may not have an ADR component (meaning that the companies IFN invests in may not be traded in the US or maybe traded only in India)

you always worry a bit about currency fluctuations when exposed to overseas securities; especially with the uncertainty surrounding the US dollar.

this is one of several good reads. it sounds scary, but that's part of the territory. India's elements of capitalism seem western in nature, and will mature through trial and error in the open market. this is in stark contrast to China's neo-Confucian approach to its economy. what China misses out in terms of price efficiency, it will make up in terms of fiscal austerity.

http://www.forbes.com/2006/12/22/asia-india-china-pf-guru-in_sd_1226soapbox_inl.html?partner=yahootix


the thing to keep in mind about IFN is that it is a "non-diversified closed end fund". given what i've seen from the fund, especially in how it correlated to the fall and bounceback of the SENSEX this year, it seems that IFN is an actively managed fund that relies heavily on growth, and trades at a considerable premium to the net value of its holdings. your risk lies more in the ability of the specific fund to invest profitably in growth than it does in currency fluctuations.



[Edited on January 2, 2007 at 12:28 PM. Reason : sdfsadfsfjsf]

1/2/2007 12:27:37 PM

IFN's got a nice dividend as well. thanks for the heads up on that one.

Incidentally, my ETF research this weekend also put FXI on my radar. But I'm also concerned about remaining upside after the recent run-up. I'll probably watch it for a while and see.

1/2/2007 1:28:47 PM

^^ Great info.. will begin my research now

1/2/2007 1:59:04 PM

chinese federal life insurance stock, it's the only game in town there... yay for exploiting communist countries!

1/2/2007 2:50:32 PM

people on this board always talk about good dividends...actually, most of you (assuming you are young/don't need the cash) should prefer a smaller dividend and the firm to reinvest the money or buyback stock (increasing EPS) because of the double taxation of dividends.

1/2/2007 5:24:06 PM

Quote :

"Explain how individuals and a percentage of mutual funds beat their indexes every year. Yes, there are even ones who have beat it consistently. "

Im not exactly an expert on these things but Ill do my best...

1) risk premiums. Many of these individuals/funds probably had higher expected returns from the outset due to the riskier nature of their investments. Maybe they will never get bitten in the ass from some of these riskier strategies or maybe they experience losing years (compared to the indexes) in the future that will offset their past gains.

2) some of these people might be REALLY good at what they do and are consistently picking winners. However, the Nov '06 Money magazine had an insert that showed some guy who had beaten the market for 15 straight years and had a huge losing '06. Showed many other prominent investors who had similar results in '06.


3) Blind luck. If you take 1,000 independent investors and each one has a 40% random chance (takes into account the fees, taxes, etc) of beating the index each year.... after 5 years you'd have an expected value of 10.25 investors who had beaten the market all five years. Additionally, you've have another 76.8 investors who beat the market four of the five years.

So just by blind luck you'd have 87 guys out there proclaiming to be financial experts who actually have the track record to back it up. Not to mention the bazillion other people who cooked their numbers and didnt correctly account for all of their transaction costs who claimed to have beaten the index.

Its almost like those handicapping schemes where they tell half of the callers to bet on the Steelers and half to bet on the Eagles... the winners call back and half of them will win the second week as well....


Theres several old tricks mutual funds use to make their bottom line look consistently good over the long term. The thing is, its not difficult at all to make money through the market. You have to be a really unlucky or really stupid son of a bitch to lose money consistently. Unlike poker, gambling, and other negative sum games investing is a positive sum game. You're supposed to win... You just have to come to the understanding that people who win big are for the most part lucky and could have just as easily lost big.

If you wanna bet your retirement, your yacht, and mercedes SLK on the profit margin of some corporation that may or may not manage their profits wisely then go for it. Otherwise, you're probably better off just taking the broadest base of stocks that you can possibly get to minimize your risk.

There's nothing wrong with 10% return. That means your money is doubling almost every 7 years. At 10% return, a $10,000 investment is worth ~$600,000 after 42 years.

At 12% return, a $10,000 investment is worth a little over a $1 million after 42 years.

Just realize that taxes are gonna eat up a huge chunk of that extra $400,000 and that you're almost infinitely more likely to go broke while chasing that extra 2%



[Edited on January 2, 2007 at 6:00 PM. Reason : a]

1/2/2007 5:57:30 PM

^Nice response

You have to realize, I'm not gambling, I'm simply trying to get opinions on the two different and very strong opinions on investment methodologies.

As I see it, in the whole indexing vs active management, both sides tend to data mine (accidentally too) when they happen to see data that matches their beliefs.

Sure, you could say that statistical outliers are the reason behind such great gains / returns. This could be applied to the wealthy in general, this could also be applied to life in general. Other reasons could help to increase your chances of being a "statistical outlier" too.

-An index fund is probably a great idea for the *majority* of people who instead have placed their money into mutual funds that under perform and have a high amount of expenses.

-One thing is for sure, indexing has 0% chance of outperforming the market. What is a mutual funds chances? 1, 3, 5, 10, 15 year? What about mutual funds that are not selected randomly but selected based on factors such as manager tenure, # of years beating the index, total assets, etc.

-Check the down years of the following funds (2000-2002):

VWINX, OAKBX, OAKGX, TBGVX, DODGX, DODFX, RPSIX, TAREX, VMMXX

Now, I realize this neglects asset allocation and many of those balanced funds should not be compared directly to the S&P500. But when you start doing asset allocation, or pulling back your investments in U.S. stocks, isn't that active management?

-Doesn't vanguard have actively managed mutual funds?

-And for someone like me who cannot meet the minimum of $30k for vanguard index funds in order to diversify, a simple balanced fund is very attractive. ETFs are not effective for dollar cost averaging.

Just a few of the questions I'd want to have answered.

Believe me, I like indexes, I argued with our family's "financial planner" for them...

[Edited on January 2, 2007 at 6:37 PM. Reason : fyi i got a lot of these arguments from morningstar's discussion forums]

1/2/2007 6:35:29 PM

Quote :

"Unlike poker, gambling, and other negative sum games"

Bite your toungue!

1/2/2007 7:31:02 PM

posted this in 2006 also. I just want to cover both ends.

Quote :

"***interuption*** I am here today to ask for some help from you all. I would like to beging investing in the market but am not real sure where to begin. Basically I have done rather well in the sports betting arena this year. Nothing crazy but I pulled out my initial investment long ago and have been working with profit ever since. This is the capital I would like to invest. Seeing as it is extra money that I did not have anyway. I guess I have quite a few questions. Who should I invest with? Use a company like Ameritrade or no. Where do I acquire advice about up and coming companies? Where is a good place to just learn about the subtleties of the market? A specific book, a website, a person. Should a portfolio always be diverse to limit losses? I just imagine that to be a low risk low reward situation similar to sports gambling. Bet $500 on x to cover the spread and you get $500 profit or loose it all. bet $100 on a b c d and e and you more than likely wont get every bet correct but you wont get every bet incorrect either. If you have read all this I appreciate it. Any advice would be great. I guess PM me with any helpful data or IM me. I'll keep checking back to see if there is any info as well as do research online and ask around."

1/2/2007 8:38:27 PM

Who should I invest with?
-I use Scottrade. I've also used tdwaterhouse in the past.

Where do I acquire advice about up and coming companies?
-I usually just scan the internet for new articles. Morningstar, msn money, and cnn mainly.

Where is a good place to just learn about the subtleties of the market?
-Investing for Dummies would be a good start. I think there is also an idiots guide to investing or something similar. I also read bankrate a lot.

Should a portfolio always be diverse to limit losses?
-YES!!!

I just imagine that to be a low risk low reward situation similar to sports gambling. Bet $500 on x to cover the spread and you get $500 profit or loose it all. bet $100 on a b c d and e and you more than likely wont get every bet correct but you wont get every bet incorrect either.
-I'm not sure what you consider low reward. If you manage to double your money from $500 to $1000 in a 5 year time period you are getting 12% returns which are considered very good. You are not going to double your money over night like with sports bettings. Shoot for doubling every 7 years (about 10% return)

1/2/2007 8:39:35 PM

^ thanks for the advice. I had no idea about how small the margin for gain is. I will look into the places/books you recommended

1/2/2007 8:57:10 PM

It's still way better than letting your money sit in some checking account making .75 % a year.

1/2/2007 9:16:04 PM

damn, FXI up 4.93% today.

1/3/2007 10:44:22 AM

^^^ how about Motley Fool?

from my novice experience, they seem to be the best.

1/3/2007 10:44:59 AM

^ They used to be. All of their free articles are just glorified ads for their various services these days. I assume that the good, informative articles they used to post are now available to paying users of the site, which I'm not.

1/3/2007 10:49:10 AM

oh, i was never under the impression that there were any free articles. any email i get from them has a subscription offer at the bottom for one of their many newsletters.

most newsletters cost $150/year for a paper copy, and give you access to past issues as well online.

i have just been reading the averaged % gain/year that some of their pickers have averaged over the past 10-20 years, and it sounds phenomenal, compared to index gains.

for example, like 27%/year, or 45%/year.

makes me wanna buy a subscription. or should i not bother? if so, what are some still free regular columns by experts?

1/3/2007 11:19:43 AM

45%/year

I'm going to refer you to #3 of Rally's post

1/3/2007 11:22:19 AM

SIRI to post positive cash flow for Q4. Stock up 7.9% so far.

http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20070102-000373-2045

1/3/2007 11:40:42 AM

Quote :

"damn, FXI up 4.93% today."

no shit

and CSCO almost past 28

1/3/2007 12:14:06 PM

question:

I have some Duke Energy stock and they just spun off Spectra Energy - causing the price of duke stock to go to 19.00 from 32ish

i use etrade and have for about 2 years now. when does the spectra stock hit my account? it is showing me a loss of almost 40% right now. That can't be right.

1/3/2007 1:13:25 PM

GE's up a good bit today.

1/3/2007 1:20:08 PM

as is VZ SUN TRID ORCL... (from my watch list)

interesting day.

1/3/2007 1:24:26 PM

anyone?

1/3/2007 1:27:07 PM

no idea, never been in that situation. I imagine there has to be some information out on the Internet that would tell you...

1/3/2007 1:28:59 PM

XOM's taking a hit.

1/3/2007 1:33:54 PM

Slightly off topic, but if anyone wants a subscription to the Economist for $69 let me know. I get it for $98 myself if I give a gift subscription for $69. I'll even throw in the gift t-shirt if you want it. 1st PM wins

1/3/2007 1:44:36 PM

^^getting some bad publicity from the Brooklyn and 'interest group' stories.

1/3/2007 1:50:01 PM

well dammit.

i had some really good gains about 30 minutes ago.

1/3/2007 2:19:45 PM

^^^ man, that's a really good deal.

I just cancelled my subscription simply because I just don't have the time to read them all. definitely one of the best magazines on the planet.

1/3/2007 2:59:56 PM

yup, which is why I'm trying to get someone to go for the gift, because it is def $$ normally

i hear you on the frustration though, i've learned to pick and chose what i really want to read and hope i don't miss anything good that i've skipped. i wouldn't pick up any of the big American news magazines anymore - utter garbage compared to the E

1/3/2007 3:04:58 PM

What are the pros and cons of class C funds? I know what they are. I'm just not sure when I should purchase them vs class B funds vs class A funds. Thanks.

1/3/2007 3:48:34 PM