The 2011 Hotlist Results – Final

Week 52 of 2011. Final year summary.

The final week of trading was shortened to just 2.5 days and volume/interest was light as was news. Equities limped across the line like a bunch of recruits completing the most toughest of assault courses.

What a year? 2011 certainly kicked off the new decade with more than a bang. If economic concerns were not enough already for the markets to ponder – mother nature thought she would stick the boot in for good measure too. 2011 started with the worst Aussie floods in years causing major disruption to coal production and stymied exports from the world’s largest exporter for weeks to follow.

Then came the worst earthquake in years to hit New Zealand, devastating Christchurch and surrounding areas. Mother nature was clearly in a rage. This was  perhaps the precursor to what then followed in Japan. If investors hadn’t had enough on their plates already – then what came next really tested the mettle. In a few short days, Japan was turned from a calm and relatively stable economic position, into a country that looked like it had the rug pulled out from under its feet. Threatened with nuclear disaster, communication was key and unfortunately it was poorly executed. An unfortunate trait that would continue into Europe later in the year.

Then came the arab uprisings. It started with just one man. Mohamed Bouazizia 26 year old Tunisian street vendor who set himself on fire on 17 December 2010, in protest of the confiscation of his wares and the harassment and humiliation inflicted on him by a municipal official and her aides. Just 4 weeks later and President Zine El Abidine Ben Ali was forced to step down, after 23 years in power. Bouazizi’s sacrifice/death sparked the most dramatic arab uprising ever seen in modern times. Libya followed but not without a fight. A lengthy crisis that had the markets firmly on their toes. The uprisings still continue with Syria looking like the next one to fall.

If the above wasn’t enough already to cause investors to take flight and exit for safety – then came the big European debt crisis. It wasn’t a surprise to see Greece in trouble, the markets had known about this issue since 2009. As had Merkel and co. Trouble is – no-one wanted to accept responsibility and most of all – most were praying that economic growth would return to keep greece afloat. From early 2009 – it was like a race against time for the banks as they all began off loading their Greek debt/securities exposure. A few rather brave hedge funds thought it would be a good idea to bet on the debt being managed/supported as surely Greece was too big to fall in the grande scheme of things. They were wrong. The debt holders/bond holders were forced to take a 50% haircut which may end up as much as 75%. Many hedge funds went under. Lesson No: 1 – never second guess the market when in unchartered waters.

But hedge funds going under is not out of the ordinary. They play high risk games and will always have a bloody nose from time to time. But a ‘country’ going under is a different matter and ‘countries’ an even bigger issue. With the prospect of the Euro Crisis resulting in precisely that outcome – the ECB was forced to step in and flood the banks with money. In the meatime, the politicians decided that the crisis was an excellent opportunity to strengthen their positions in the EU. The two main players in Germany and France decided they would play ‘chicken’ with the world’s economy while they argued how to spread the burden and bolster their own political standings. The period (which is still ongoing) was like watching an episode of EastEnders. Doom and gloom every day backed up by weakening economic news and Arab uprisings.

2011 was not a year to invest. It was a year to sit out. The real money to be made was by simply not trying to make any money at all. But that is said with hindsight. At the time, and the way events unfolded – it was hard to see the true market direction through the noise that was part mother nature and part arab uprisings. By the time the smoke had cleared – the market was derisking and money was exiting faster than many could believe.

Amongst all of the above – one would have expected the Major Indices to have been slaughtered. In fact, quite the opposite. The DOW Jones finished the year at 12218 turning in a very respectable and remarkable 640pt gain from last years 11578 close.

The FTSE 100 on the other-hand did not fair so well. Heavily weighted to Commodities, it suffered due to the markets negative outlook for the sector. It closed 2011 at 5572 and down 327pts for the year.

In summary – in a year that looked and sounded apocalyptic, the US markets turned blue. Figure that one out!

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A virtual portfolio has been set up using the 2010 Dec 31st close figures as a starting point and £1000 has been invested in each stock. This does not include buying fees or stamp duty and is purely intended to be used as a benchmark or summary for each week. The B-list (alternative picks) and 2 newspaper top tens for 2011 have been included to help monitor/compare against.

The virtual portfolio’s use the ‘last trade’ system to calculate the days close.

Week 52 performance summary as follows:
The Independent wins hands down. Well done to them. As this is the 2011 final summary – it’s worth throwing in the other two big newspaper tipsters too. The Telegraph came in second with Tempus Times in 3rd and Guardian in fourth. The more risky and commodity based Hotlist and B-list props up the table and demonstrates the risk of placing all eggs in one basket. But the Hotlist has never been about ‘playing safe’ – it’s about seeking multi-baggers. Stocks that can add 100% or more. Like the hedge funds found out in 2011 – if you play high risk stakes then expect some bloody noses along the way. Whilst 2009 and 2010 have delivered Multi-Baggers aplenty to thesharehub – 2011 delivered a brutal blow and a reminder to all investors that the markets are far from predictable.

Week 52 – Final Results
1. The Independent -3.80%
2. The Telegraph -11.00%
3. Tempus Times -14.62%
4. The Guardian -22.21%
5. The ‘B’ List -41.11%
6. The 2011 Hotlist -45.04%

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2 replies on “The 2011 Hotlist Results – Final”

  1. I was about to write exactly the same as Geoff above. A blow by blow of each of these would be great….. or just do the ones i’m in you you like 😉

    SW

  2. Appreciate you website and your insightful and thought provoking commentary. What a year for the high risk plays!
    What I miss, though, in your review of 2011, is a company-by-company evaluation of the companies on your hotlist and B list and your expectation of these companies going forward. Clearly XEL screwed up bigtime – and there may now be a dog or two in those lists – but what of the others? Perhaps that is asking too much.

    Thanks, and keep up the sterling work.
    Thanks also to Gramacho for sharing his considerable experience with us on your website.

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