Well, it's that time of year again. The time when Barron's wheels out the Barron's Roundtable, comprised, apparently, of the most consistently incorrect nincompoops in the trading universe.
Now, let me be clear. The notion of a widely-read business publication discussing the top investing ideas of world-class money managers, and then reviewing the performance of those ideas annually, makes sense to me. I'm always eager for investing ideas, and Lord knows there are plenty of people smarter than me.
But I have a huge beef with the Roundtable. Namely, that the advice completely stinks. And, just to pour salt on the wound, allow me to share the very first sentence offered in the dialog between Barron's and the esteemed panel:
"Let's forget about 2008 – and that includes most of your stock picks."
OK. Now just hold it. Let me temper myself and get this straight: Barron's interviewed these people for their investment counsel (God knows it wasn't for their good looks……….) a year ago. The entire point of the article was to glean ideas from them in the form of stock picks. And now, a year having passed, and almost every one of them doing miserably badly, Barron's lets them off the hook right from the get-go by saying forget about the entire past year? ARE YOU FREAKING KIDDING ME?
Piss.
Me.
Off.
Anyway……….there's another thing Barron's does which really puts my panties in a bunch, and that is this: they do a completely horrible job with their Report Card (that is, the summary of the members and their prior picks' performance). Among my complaints:
- They don't offer an average. They might show a given person and their 8 picks, with the respective performance of each, but there's no average. Are these people stupid? If I wanted to show you how the Dow wrapped up the year, would I show you the percentage change of all 30 components, and neglect to leave the average out? Morons!
- They don't flip the polarity of the performance for short positions. So if someone recommends shorting something at $100 per share, and it plunges to $20 per share, do you know what percentage figure they put in the performance column? That's right, -80%! So the usual innocent reader scanning the report card to see how these folks did might see the -80% figure, shake their head in sympathy, and mutter how this analyst must not be very good. Hey, Barron's! It should show 80% (a positive figure), because it was a short position! Sheesh.
- They have completely bizarre and useless ways of expressing performance for Forex suggestions. So, for instance, it shows "Short the Euro/Buy the Yen", and it goes on to show the Euro was 160.09 Yen at the start of the year and 126.70 Yen at the end. I'm sure with a little thought, folks could sort of figure out if the idea was good or not, but come on – – – can't you compute some kind of performance metric instead of just showing raw figures? You certainly do it with all the other trading ideas (albeit poorly).
Well, since I have this really cool program that Barron's apparently has never heard about called Excel, I have taken part of my weekend for you, my beloved reader, to show you how sucktastic most of these Roundtable members are. Here, then, in the same order as they appear in the Report Card, are the percentage performance figures for the 2008 recommendations by the members of the Barron's Roundtable:
Scott Black -42.26% Abby Joseph Cohen (rorrwwwwww....) -18.88% Marc Faber -38.98% Mario Gabelli -35.85% Bill Gross -33.42% Fred Hickey (the only bear in the group) 22.25% Archie MacAllaster -62.47% Art Samberg -63.07% Oscar Schafer -12.7% Meryl Witmer -33.6% Felix Zulauf -17.58%
Wow. Quite a scorecard, isn't it? Take a moment to drink in the performance of these people who are paid millions of dollars a year to manage the money of others. While you're doing that, here are some fun facts:
- All seven of Archie MacAllaster's picks were losers in the deep double-digits. Every. Single. One
- Not to be outdone, all eight of Art Samberg's picks were losers, three of which fell more than 80%. Plus, Art is our #1 loser in the whole bunch. Way to go, Art!
- Bill Gross – – the world-famous, super-brainy bond king – – offered bonds from General Motors and Ford Motor among his top picks for last year. Yes! I knew that super-sized noggin was there for a reason.
- Marc Faber correctly posited that China was headed for a fall………..so, incredibly, he found a way to be right and still lose money. He suggested shorting FXI and buying FXP, both of which got creamed. Those of you acquainted with these ETFs probably know why. Truly he pulled defeat from the jaws of victory.
- Mario Gabelli – – who has been on this Roundtable since the invention of paper – – suggested LIN TV as a favorite for 2008. It fell over 90%. I would also note Mario and I share something in common – – our performance for 2008. Except for changing his performance by one order of magnitude and then flipping the polarity.
And these people aren't just bad at picking stocks. They can say some really stupid things as well. Marc Faber offers this:
"It would be best at this point for the U.S. to have 10% less consumption. It would make people save again and follow Christian principles of frugality and humility." {emphasis added by yours truly}
Listen. I have some advice for anyone listening out there. If you're ever sitting in a room full of Wall Street types from New York City? M'kay? And you're talking? It's probably not a great idea to cite Christianity as the fount of frugality and humility. That statement probably really spun Abby's dreidel. Not cool.
And, Archie MacAllaster, having been just barely edged out for the worst possible performance, was frustrated at some of the (gasp!) caution a few members were expressing, and huffed:
"I can't believe you people can't find one good thing to say about the market, and at its low last year the market was down more than 50%. The bad news is in the market….The stock market is probably the place to be, particularly in financials……the process has created bargains."
So the logic here is that because stocks have been battered, they are bargains and should be bought. This from a guy whose sound advice yielded a 62%+ loss last year. As Edith Bunker might say, "Archie, Archie, Archie."
If the article from Barron's did anything for me, it is this: it convinced me that virtually all professional analysts and money managers are morons sub-optimal traders. And it convinced me that this bear market has a long, long way to go.
Oh, and Abby? Love the new 'do.
