Excerpt from Money Central on MSN.com
10 pros’ stock picks for 2010
Editors of investing newsletters with proven annual returns provide both bullish and bearish outlooks for the coming year. Bottom line: Stocks still have an upside.
By Michael Brush, MSN Money 12/29/09
While investing giants such as Warren Buffett and George Soros command the media spotlight, an elite squadron of stock jocks operating under the radar also merits your attention.
These unsung market heroes pen investing newsletters stuffed with recommendations that have produced 10% to 25% annual returns over the long haul — no easy task.
So what’s their take on 2010? Most of these authors see more upside for stocks despite the long rally we’ve already seen. But thankfully — if you’re bullish on stocks like me — there’s a mix of bullish and bearish views. This is reassuring because:
• The bulls confirm that, given the economic challenges we still face, you haven’t lost your marbles if you still own stocks after this year’s rally.
• The bears provide the proverbial “wall of worry” that market lore says stocks need to keep climbing. Perversely, it’s when worries are resolved that stocks tend to pull back. (Of course, these bears don’t see it this way. They believe they’ll have the last laugh by the end of next year — and they well might given their track records.)
Despite the newsletter editors’ successes, only a few investors are privy to their advice, because these experts charge sizable subscription fees. So at the end of each year, I check in with them to give you their take on what’s in store for the next year.
I first identify those with the best long-term records, as ranked by the Hulbert Financial Digest. Then I ask for a market outlook and two investment picks.
As you read through their 2010 projections, remember that not all of these experts believe it’s possible to predict market moves a year in advance. The annual returns listed are the highest returns for each newsletter over five to 25 years, as calculated by the Hulbert Digest.
1. Cabot China & Emerging Markets Report: 23% annual returns over five years.
Stock market outlook: Editor Paul Goodwin believes the stock market rally could continue in the near term, based on technical analysis. He doesn’t make full-year forecasts.
Goodwin hunts for aggressive growth stocks that trade north of $10 a share because that means institutional money managers can buy them and drive them higher. He invests in emerging-market stocks through American depositary receipts, a type of U.S. market listing of a foreign company.
Two picks: Goodwin likes E-House China (EJ), a real-estate company that’s a play on the growing Chinese middle class. The company acts as the sales arm for residential-real-estate developers in China. Goodwin also likes Gafisa (GFA), a developer and homebuilder that’s a play on increasing homeownership in Brazil.