In past years, one of my favorite contrarian strategies was to buy up beaten down large caps, in anticipation the new year would bring forth better fortunes. Last year was the exception to the rule. However, taking a look over the level of carnage imposed onto large caps this year, barring a full collapse, there are some bargains to be had.
Let’s have a look, shall we (WE SHALL!)?
Here are some names that stand out to me, with 2011 percentage loss statistics.
RIMM -75%
AEM -52%
MT -51%
BTU -48%
RCL -47%
GM -45%
JNPR -45%
TCK -42%
UPL -38%
FCX -37%
AVP -37%
SPLS -37%
NTAP -34%
BRCM -31%
GLW -31%
AGU -26%
SU -24%
BHP -22%
If you noticed, I excluded financials. The industry is too opaque and toxic to mention. For the most part, all of the above companies are financially sound, blessed with good balance sheets. Hard times befell the shareholders of those names in 2011 only because they went up so much during 2009 and 2010. If 2011 was a “consolidation” or reversion to the mean year, perhaps 2012 will represent a revival to the animal spirits that made them such good stocks in previous years.
The story of 2012 will be deflation versus inflation. Should the Fed act alongside the ECB to reflate, the above names will soar. However, if my dire predictions of famine and European collapse materializes, deflation will bury the above names, allowing TLT to go up as if it was a dot com circa 1999.
Although it is hard to get the timing of this delicate trade right, as we ebb and flow between these two realities. One thing is certain: there will be no middle ground and someone is going to make a killing by making the right bet.
Flip a coin.
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I like fcx For 2012
if all else fails, you can always do da De bow
Don’t ask me how my sister came up with this stock idea, I think she was reading about the company and liked its technology. The company was Owens Corning. That stock crashed to about $18 in October after a bad earnings report and hasn’t looked back since. I remember saying to her, “Deb, Owens Corning is under $19,” but the market was faring so badly neither one of us wanted to touch it. Everyone else did and made money.
what about spwr?
How about some Eastman Kodak?
(former dow component)
REALLLLLLLLLLLLL CHEAP!
I think RIMM is the exception. It is getting kicked in the groin, daily. I’m not sure it will thrive, considering the competition.
I am a contrarian contrarian. So I say go with the large caps that did well in 2011. Why flush your money down the sewer hole on a company that can’t get their shit together?
first, deflation and collapse…then, as the gov gets desperate, you will get your easing.
“Flip a coin.”
You’ve traveled to the future, which way does it fall, Plutonium Petey?
I will be buying BAC just to piss off zero hedge.
Also, I say RIMM gets bought out, most likely by some Chinese or Saudi types.
No way a saudi or Chinese buyout happens. Given that the encryption is the only allowed by govt and military, they want to get this in US hands.
My bet is either GOOG because the wallet is not really secure and they’ve got a ton of cash. Or, hedgie(s) acting as proxies for Carlyle Group.
Regardlesss, at $7B in mkt cap, $7B in assets, and $7B in patents and no debt, this company gets taken out. This is no Nortel.
I bet they sell the encryption to GOOG, and the rest to some foreign idiots. GOOG already has Android all that’s of value to them is the encryption.
not sure about that the CEOs are a tough bunch. besides for GOOG to buy them its not even a parking ticket.
yeah, but GOOG doesn’t like having bullshit on their balance sheet.
shameless plug:
http://ibankcoin.com/djmarcus/2011/12/16/rimm-tell-me-why-i-shouldnt-buy-it/
why im a jackass:
http://ibankcoin.com/dchsn6/2011/12/17/buyrimm/
Add RIG and HAL to that list, but wait for the Nuremberg trial coming in Feb.
My SLB shares and I will be lying in the weeds to pick up the scraps after BP sends HAL into bankruptcy.
A company with ties to Cheney does not file for bankruptcy.
I think Dick Cheney and his baboon heart are going to have a tough time dealing with this possibility:
http://tinyurl.com/8ycpoms
But in all seriousness, I think this is pure comedy by BP’s legal department. Their (BP) guys fucked up and they know it. They are just trying to deflect blame and eventually this will get settled for a much smaller amount.
POT & MOS also took it on the chin along with AGU
Dr.,
another classical lol and by London Symphony orchestra 🙂
two of my childhood friends play there.
Thanks.
Damn, that’s not messing around.
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Why not just put half your money in dollars and half in bullion and eat sandwiches all year
When is the 2011 stock picking champ announced (or maybe I missed it)?
fly, isn’t it time for a 2012 chart-art?
Quite the large gap open today. Very significant from a technical perspective if it holds. Interestingly, our major indicies will all be trading above their 200 Day Moving Averages which implies that US equities will be setting the pace. If Germany is up 3%+ in last two sessions, we should be up 4%+. Bears will be well served to cover before this AMs PMI report which will be much better than expected.
Correction, ISM Report this morning.
Haha,
I was the only one bullish with my predictions and January effect lmao.
Winning all the way to the bank this morning.
Good day.
I’m with you Partridge. On Friday, I bought V weekly 105 calls that expire this coming Friday. Been sweating that position all weekend. The only thing I am sweating now is my ability to sit until Friday since we are in a bull market and that’s how the real big $ is made…
Um, I think perhaps you might want to recheck yoself, before you re-wreck yoself.
_________
I got this one Jakey…
wprt hitting 52wk high…+26%