Personal Finance

4 Top Stock Picks For 2010 Competition

It’s that time of year again – resolutions, diets etc but most importantly it is the 2nd annual top stock competition.  Last year at this time I got together with a group of bloggers and we all picked 4 stocks that we thought would perform the best in 2009.  I ended up finishing in 5th place with a 35% return.

This year I’m doing something different – I’m betting against gold.  I can’t understand why gold is even considered a good investment, never mind getting elevated to the prices it reached in 2009 ($1226 was the peak).

Here are my top 4 stock picks for 2010 (and yes, ETFs are considered as stocks for this competition)

  1. PowerShares DB Gold Double Short ETN (DZZ) – $NN
  2. ProShares UltraShort Gold (GLL)
  3. PowerShares DB Gold Short ETN (DGZ)

Here some links to the other competitors:

Zack Stocks

The Financial Blogger

My Traders Journal

The Wild Investor – 4 stocks to buy in 2010.

Where Does All My Money Go?

Intelligent Speculator

Dividend Growth Investor

26 replies on “4 Top Stock Picks For 2010 Competition”

Double shorts aren’t the best choice for an investment horizon of one year. If there is a lot of volatility in the price of gold, these ETF’s can go down in value even if the price of gold is lower at the end of 2010.

If you are betting against gold, shorting CEF.A as one of your contest picks might work out better.

Dillon, you are absolutely right. I was allowed to short investments in this comp so I should have tried to use that.

Regardless I think gold will crash this year and my investments will do fairly well. 🙂

Gold has been one of the best investments of the decade and yet it is still just half the price of it’s all time 1980 high after inflation adjustment. This has been the tenth year in a row that gold has increased substantially. The only reason why the price of gold isn’t $3000 right now is that central banks throughout the world have sold and leased gold into the market in an effort to manipulate the price of gold downward. But lately that has all changed as central banks have not only stopped selling but have now turned buyers as the currencies of the world are inflated through reckless money printing. It’s a good thing that this is just a fun competition and not real money because your picks will definitely be the worst choices of the bunch. You couldn’t have picked a worse year to be short gold. The fundamentals for gold to rise have never been so positive in history. This time next year the price of gold will be double what it is today and what will your contest entry do for your credibility as a financial blog?

Don, as luck would have it – this financial blog has no credibility so making bad stock picks is not an issue.

You’ve done a lot of yappin’ about gold but why don’t you share what you own? What percent of your porfolio is gold/gold companies?

The following stocks in my equity portfolio are all listed on the TSE. I have no USA stocks because I believe the current strength in the US dollar is a temporary move and the downtrend of the US $ will continue to drop in 2010 to new lows.

35% Gold & silver stocks ELD, GSC, IMG, SMF, SVM, AGI, CEE, GAM, JAG, SLW

40% Dividend paying stocks BNP.UN, BPF.UN, CHL.UN, CLC.UN, CMG, CPG, PKI.UN, RSI.UN, SRV.UN, STR.E, T, ZAR.UN

25% Preferred stocks paying dividends & growth stocks AGU, YPG.PR.D, GAS, ECA, ATP, AGU

As gold and silver stocks rise through 2010 I plan to
take profits and increase my dividend paying stocks. I believe precious metals, energy and other commodities will do do well in 2010 as hard assets will be a popular choice for those who want to protect their assets from inflation that is on it’s way.

To diversify even further I have rental real estate that adds income and has also been increasing in value here in Nova Scotia.

Sorry for the long post but I did my best to reply to your questions.

leveraged ETFs are bad products for holding periods longer than a few weeks. It would be a shame if you were right and your positions failed.
I bet that in fact you are right and offer a side bet that a short EFT position will beat your juiced up choices. Better still, properly chosen puts would blow away either short.
A few months ago when gold was still $1030 or so I wrote about a call strategy that would return 4X your money if gold only moved to $1250. Similar strategies can be created for a downside bet.

Thanks for the info Don.

Joe – you are right. The problem is that I didn’t want to spend more than 5 minutes putting the portfolio together which is why I might have ended up with less than stellar choices.

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