2018 Stock Picking Contest: 2Q Results

\"\"Some of the savviest investors in the personal finance world. Early retirees. Workers still in thrall to the Man. A 7 year old child. A dog. And a grown man who doesn’t believe there were once dinosaurs. The ABL Stock Picking Contest brings them all together in a chase for immortal greatness. Who will win?

At the end of Q1, the market was down and things were looking a bit sketchy. There was even a hint of a trade war brewing.

Now, we’re in a full-fledged trade war and the entire world order seems shaky, so of course it makes sense that the market is up. The S&P 500 was up over 2% YTD at the halfway mark, and much more at press time (editor’s note: “Then perhaps you should publish this update closer to the quarter end?” Noted.).

As a group, we’re not doing as well, with our combined picks down almost 4%. Thankfully though, we’re not a team, so let’s celebrate the winners and shame the losers.

Results are YTD through quarter end and include dividends paid. I’m increasingly certain that mistakes will be made, so any contestant is welcome to gander my spreadsheet, and I’m sure the quality control process will tighten up before our final annual results.

Mr. Smith

  • ConocoPhilips COP 27.41%
  • Darden Restaurants DRI 11.92%
  • Alphabet Inc. GOOG 6.42%

Total 15.25%

Mr. Smith, despite a sparkling finance pedigree, is fraidy scared of picking individual stocks with real money. So of course it makes sense that this dyed-in-the-wool index investor is leading our contest.

Mr. Smith’s picks are all humming, and I’m a big fan of COP, though I think Mr. Smith and I will both wish we could lock our petro-gains before year end.

It appears my dislike of DRI was ill-founded. It also may weather the trade war better than most. (Astute investors might note that another facet of current events could leave Darden with no kitchen staff, but they’ve already piloted a new “no dishwashing” program and diners haven’t noticed a difference. Consistency trumps quality, right?)

Mr. Tako Escapes

  • AerCap Holdings AER 2.87%
  • Amgen Inc. AMGN 6.78%
  • LyondellBasell Industries LYB 0.72%

Total 3.45%

Mr. Tako was looking for value, and it appears he may have found it. I’ve spent 3 minutes considering his portfolio, and I think he may have one of the more Trump-proof ones in the contest. His tentacles are starting to tighten, and he’s going to be a contender.

My 7 Year Old Son

  • Southwest Airlines LUV -22.37%
  • Target TGT 17.30%
  • Costco COST 12.19%

Total 2.37%

My son and his stuffed koala bear are still in the thick of things. The airline industry is already feeling some pain and Southwest Airlines is a stone around his neck, but his retail plays are looking grand. The ranked performance of his picks is exactly opposite from what I thought it would be, so that’s an added bonus of humility from being bested by my son.

Mike

  • Federal Realty Trust FRT -3.40%
  • Alphabet GOOGL 7.23%
  • Paychex PAYX 1.57%

Total 1.80%

I still don’t like this entry, but the scoreboard says otherwise. I’m a bit curious at the spread between GOOGL (with voting rights) and Mr. Smith’s GOOG (with no voting rights). Prolly should look into that.

My Money Wizard

  • Vanguard Total Stock Market ETF VTI 2.79%
  • Vanguard Growth ETF VUG 6.58%
  • Vanguard Total International Stock ETF VXUS -4.08%

Total 1.76%

Shockingly, My Money Wizard’s index entry sits squarely in the middle of things.

However, the wild ride of VXUS is testing his nerves – next year he may need to play things more conservatively.

DQYDJ

  • Skyworks Solutions Inc SWKS 1.34%
  • Gilead Sciences Inc GILD -0.29%
  • Express Scripts ESRX 2.96%

Total 1.34%

PK is no longer a man among boys (except relative to my 7 y.o., I guess), and his first half performance is looking positively pedestrian. ESRX might even get Amazoned after the PillPack purchase. Can I start getting excited to overtake PK?

No, it appears not. The last two weeks have been very kind to PK (further reminder to post this report in a timely fashion). In the interest of our burgeoning friendship, I’d advise him to stop winning.

Asset-Based Life

  • General Electric GE -21.22%
  • BP BP 11.41%
  • Sony SNE 12.81%

Total 1.00%

The vultures are circling GE, and I think it’s going to be declared the Worst Company Ever soon. And yet I’m still in this contest. Yeah!

I’m pleasantly surprised to learn that the oil industry may still exist as far out as the end of this year. Take that, Elon Musk! I’m considering taking my real-money BP profits now, which would be a nice consolation if I lose out on the much better prize of ABL Stock Picking Champ.

(Note: I still own BP and GE.)

Dividend Growth Investor

  • Vanguard High Dividend Yield ETF VYM -1.85%
  • iShares 20+ Year Treasury Bond ETF TLT -2.75%
  • SPDR Gold Shares GLD -4.82%

Total -3.14%

DGI’s entry was based on a fairly simple premise: bad things might happen this year.

His premise is looking sound but has yet to be rewarded. I still like his chances, though, and his Vegas odds still have him as one of our favorites.

Canadian Dividend Investing fka Financial Uproar

  • Argan Inc. AGX -9.35%
  • Morguard REIT MRT.UN -1.16%
  • Just Energy JE -12.16%

Total -7.56%

At the end of Q1, Nelson was sitting pretty. When one of his disciples pointed out that his stock picks were skipping the normal first step of a plummet of despair, Nelson smiled sagely and said, “Patience, grasshopper.”

Nelson’s picks have been kicked around a bit this quarter. They still look like good long-term value plays, but we don’t have a long term left in the contest.

\"\"Bamble the Dog

  • Motorcar Parts of America, Inc. MPAA -25.07%
  • Chubb Limited CB -12.27%
  • Eldorado Gold Corporation EGO -32.19%

Total -23.18%

I’m having to face a sad truth: it appears my dog is terrible at picking stocks.

Most investors in Bamble’s position would be under extreme pressure – he’s picked some real dogs (haha). EGO is a mess, though message boards (THE place savvy investors go for the straight dope) think the new CFO will fix everything.

But there is one area where Bamble is dominating this competition: he is as cool as a cucumber. He didn’t check his picks once this quarter. When asked about his poor performance, he stated, “My investment selection process was sound, so why would I overreact to some short term swings?” Perhaps a late-contest surge is coming from this disciplined investor.

Steveonomics

  • Alibaba BABA 5.18%
  • Starbucks SBUX -14.67
  • OHR Pharmaceutical OHRP -89.36%

Total -32.95%

One of the unexpected treats of this contest has been getting to know Steve better through his eclectic Twitter feed. I believe Steve may be one of the most entertaining personal-finance-themed twitterers this side of Nelson. And we all know personal finance entertainment is the best kind of entertainment.

On the other hand, his entry is suffering a nuclear meltdown courtesy of OHRP, where they don’t seem to have fully embraced the whole “making profits” thing. I suspect the combined net worth of the ABL stock picking entrants exceeds the current market value of OHRP. Yikes.

 

Many would argue this bull market has run its course, but that’s been true for a while. At least we’re starting to see some nice separation from top to bottom, and I suspect there’ll be some wild swings in the market and our entries in the back half of this year.

Good luck to everyone, and thanks again for playing.

 

Picture courtesy of Dimitris Vetsikas

 

 

5 thoughts on “2018 Stock Picking Contest: 2Q Results”

  1. Yay, I’m beating the dog AND the 7 year old! That’s some incredible luck!

    If only there was more to this stock picking thing than luck! Hmm….

    1. Poor performance is bad luck – great performance is pure skill 🙂

      And the 7 year old says it’s just a matter of time before he overtakes you. He thinks every slice of Costco pizza helps.

    1. As this contest, the state of the market, and the crazy world we live in all show, uncertainty abounds and there is almost nothing you can truly count on. But thankfully we can all agree that Steve is the absolute worst – he is our rock of stability.

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