Oh boy, boys and girls (and whatever else you FREAKS identify as)! It’s time to reveal the results of the first quarter of the 2016 stock picking contest. If you want a recap of what everyone picked, point yo mouse towards the 2016 picks.
In case you need a reminder, let me go over the rules. Each contestant picks four stocks that trade on any North American exchange. I tabulate the results including dividends but excluding any changes in currencies. ETFs are allowed, but not anything weird that I haven’t heard of (this is known as the DQYDJ rule). The average of the four picks is the result. As a new wrinkle in this year’s contest, I gave the contestants the option of picking cash as a position, something that would return a guaranteed 1% per year. Not surprisingly, nobody took me up on the offer.
ENOUGH PREAMBLE. It’s time for the results, yo, followed by my ever so witty commentary. Better dial 91 on your phone to call the fire department because the burns are going to get pretty hot and heavy up in here.
|1. My Pennies My Thoughts||+23.2%|
|2. Blog reader Doug||+17.4%|
|3. Blog reader Tyler||+16.3%|
|4. My Own Advisor||+13.8%|
|5. Financial Uproar||+8.5%|
|7. Freedom 35 Blog||+4.0%|
|8. Avrex Money||+2.0%|
|9. Blog reader Ben||-1.35%|
|10. Holy Potato||-1.38%|
|11. Vanessa’s Money||-3.3%|
|12. Don’t Quit Your Day Job||-4.2%|
|13. Blog reader Jeff||-8.8%|
|14. Boomer and Echo||-20.0%|
Now, onto the chuckles and random observations.
Chuckles and crap
- The best pick for the first quarter was Barrick Gold (a company I’ve taken to calling Barrick GoLOLd) by My Pennies My Thoughts. Barrick went up 72.6% in the quarter because gold had its best quarter in the last 30 years. It just shows how a truly depressed asset can really deliver stellar returns when something happens to snap it out of its funk.
- After Barrick the best performing stocks were Nemaska Lithium (chosen by Doug, up 54.6%), Lululemon (chosen by Kapitalust, up 29.1%), the Dundee preferred shares (chosen by Tyler, up 38.8%), and DuPont Fabros Technology (again chosen by My Pennies My Thoughts, up 29%). Good luck predicting those results. Who would have thought a preferred share would have done so well?
- Mark from My Own Advisor had all four of his stocks go up double digits. His best performer was Emerson Electric, up 14.7%. His worst performer was Crescent Point, which went up 13%.
- Don’t Quit Your Day Job won the 2015 edition of the contest. PK is now in 12th out of 14th. Finally, justice prevails. Good triumphs over evil and whatnot.
- Robbbbbbb (actual spelling, check his birth certificate) from Boomer and Echo told me “I’m terrible at this” when he submitted his picks. That foreshadowing was eerily accurate. His terrible picks included Fitbit (down 48.8%) and GoPro (down 33.6%).
- Holy Potato picked the Dundee series C preferred shares. They traded at $14.25 at the end of last year. They’ve been taken private by Dundee for $16.34 each, locking in a 14.7% gain. The rules state he’s locked into that return, which isn’t the worst result out there.
- YOUR BOY Nelson joined Mark by having all of his picks in positive territory. My worst performer was Directcash, which was up a measly 1.7%.
- Vanessa claimed she was a better investor than me in a recent blog post. She was wrong.
So, did we beat the market?
In the first quarter, the TSX Composite returned 5.1% and the S&P 500 returned 3.06%, at least according to their respective ETFs. We’ll use those as our benchmarks.
As a group, we generated returns of 3.79%, which beat the S&P 500 and lost to the TSX Composite. The TSX Composite is probably the more accurate index to use to gauge our results since the majority of the picks were from the Canadian markets.
Six out of 14 contestants beat the TSX Composite while seven out of 14 beat the S&P 500. If we take away Robb’s terrible last place result — remember, he finished a full 12% behind the second-worst competitor — we collectively do pretty well against the market. But we can’t really do that, because it’s not like the market can retroactively remove its worst performers too.
Besides, I fully encourage competitors to swing for the fences for this contest. Big gains are fun; so are big losses. I don’t ask the competitors for disclosure because it’s just a dumb contest, but I’d bet most don’t even own the stocks they chose. Nobody is building a portfolio using these picks. They lack the kind of diversity needed in a good portfolio.