Markets? Markets? We Don’t Need No Markets!: During its nearly 18-year history, CNBC has employed a number of programming strategies on days when the markets are closed. Today is one such day - as the nation honors the memory of its 38th president, Gerald Ford.
In this instance, we chose to go with regular live programming, despite the absence of a considerable amount of information that normally fills our day. Our theme was one that will - hopefully - be useful and profitable: “7 for ‘07” - a look ahead at picks, pans, and investment trends for 2007.
This got me thinking: how good are these picks? What if you’d watched one of our past “live holidays” - how would you have done?
I guess I’m one of those people who never throws anything away - nor deletes anything from my home computer - because last night I happened upon on Excel spreadsheet from Labor Day 1998. That year - during my first stint at CNBC - I co-produced a day of special coverage called “CNBC’s Top 100 Stocks” based on various attributes and generated by Microsoft investment experts Jon Markman and Jim Jubak.
Remember - though the summer of 1998 was a turbulent one for stocks - it was a temporary blip in a tremendous rally that didn’t end until early 2000. Anyone invested in stocks back then remembers the pain of the bursting bubble that followed and didn’t end for three years.
But what if you’d picked out some of our “Top 100” and stuck with them through thick and thin?
As a time saver - I’ve picked out a random sample of stocks that we featured that day in various categories, along with the percentage gain or loss between then and now:
Unisys Corp. -58.7%
Computer Sciences -14.1%
Health Management Associates +12.6%
Large Cap Growth
Value Stocks - Large cap
Noble Drilling +432%
Jabil Circuit +269%
Value stocks - Small and Mid Cap
Best Buy +394%
Labor Ready +99.9%
First American Financial +70.2%
American Eagle +638%
Dow Industrial Average +63%
S&P 500 +45.6%
So how would you have done? Very well - if you’d avoided the small minority of poor picks (mostly in tech) and held your stocks through the entire period. Easy to say, harder to do.
Note that if you “played it safe” - by holding an S&P 500 or Dow index fund - you would have made a decent return. Remember that this is over an 8+ year period.
Conclusion: use the experts to help narrow your choices. Do your homework. And remember that no one - not even professional money managers - gets it right every time.