I’m joining a few other financial bloggers in a friendly competition. We all agreed to pick four stocks or ETFs and watch each other throughout the year with quarterly updates.
My top stock and ETF picks for 2009 in no particular order are DRYS, NDAQ, SSO and USO.
DRYS – Closed 12/31/08 at 10.66. This is a specific company play on the Baltic Dry Index (BDI). BDI is down an insane amount from its high last year and even gaining back 20% of its losses would be big money for DRYS share holders. The economy needs to pick up some for that to work. I expect that to happen this year, eventually. I already own or have an interest in 1200 shares. I own 600 and own a call option for another 600. Too bad we didn’t start this as of 12/30 prices. DRYS gained nearly 11% on the 31st. Yes, this is a volatile stock. Be careful! DRYS is in the Services Sector and is in the Shipping industry.
NDAQ - Closed 12/31/08 at 24.71. I mentioned this one in the last days of December 2008 as one I was watching. I’m not sure it has finished its recent dip yet based on its chart, but feel confident it’ll make a good comeback in 2009 as one of the best stocks of the year. NDAQ gained 4.5% on the 31st. NDAQ in the Financial Sector and in the Diversified Investments Industry.
USO - Closed 12/31/08 at 33.10. ETF that tries to mimic the spot price of West Texas Intermediate (WTI) light, sweet crude oil. It has fallen along with oil more than most thought it would throughout 2008 and I expect it to bottom in 2009 and catch some short seller trying to catch up. It was also up big on the 31st, nearly 10%. USO is in the Specialty-Natural Resources category and in the fund family United States Oil Fund, LP.
SSO – Closed 12/31/08 at 26.27. ETF that tries to mimic double the S&P 500 index. I expect us to find a bottom sometime this year, if we haven’t already, and that will mean the S&P 500 (SPX) should go up nicely. When it does, SSO should move close to double that. I’ll admit though, this is somewhat of a cop out pick since it’s so broad, but I’ll still be putting my money where my mouth is. Even at double the SPX, SSO still has a smaller beta than a lot of other stocks these days. SSO gained 2.7% on the 31st, close to double SPY (a 1 x SPX ETF). SSO is in the Large Blend category and is in the ProShares Trust fund family.
The trick with my picks is that I’m not sure they are at their lows yet and ready to turn back up yet. Even with that in mind, I think they’ll be up from their December 31, 2008 closing prices. The rules we agree to for this competition said that we can’t use options, so we’ll be tracking strictly the shares’ prices. In practice, I’ll be starting my real trades using naked puts to profit from each of these. DRYS is the only one I currently own with 1200 shares already. I won’t be buying more for now. I’ll actually probably take some of that off the table by selling covered calls. For NDAQ, SSO and USO I think they might dip some more and then rally. That’s why I’m going to sell naked puts on them so that if they dip, I buy cheaper and if they stay flat I just keep the profits, but if they dip and then run higher I’ll do even better since I bought at a discount to the closing price on 12/31/08.
Here’s the list of the other personal finance bloggers who are competing. None of us takes responsibility for any of these picks being worth any more than fun to watch. We’re just having fun and hope to profit along the way. Invest at your own risk.
- Where Does All My Money Go
- Dividend Growth Investor
- Four Pillars
- Zach Stocks
- The Wild Investor
- The Intelligeng Speculator
- Million Dollar Journey