Reviewing 2010 Picks of Morningstar and Motley Fool
Motley Fool knocks it out of the park +68%, Morningstar knocked out with -20%
With the new year just beginning, it is time to look back at the top 2010 picks made by the gurus. In previous posts I have discussed performance of the top picks for 2010 made by Fortune and Forbes. LikeAssets has also analyzed the performance of many other research and financial websites. Below I present a couple more examples – Morningstar’s Ultimate Stock Picking team and their top picks to consider for 2010, and Motley Fool’s Rick Aristotle Munarriz with 5 Stocks that Should Beat the Market in 2010.
LikeAssets measures performance relative to the appropriate benchmarks for each investment. If Munarriz from Motley Fool selects primarily small cap stocks (he did), he should beat the small cap indexes, not the S&P 500. LikeAssets tracks the appropriate benchmark for each investment, be it small cap, emerging markets, REITs, etc., so it is possible to better measure a stock picker’s performance.
Motley Fool’s Rick Aristotle Munarriz – 5 Stocks That Should Beat the Market in 2010
Beat? How about crushed the market. With a LikeAssets score of 68% over the benchmarks, and 3 out of 5 picks with returns of over 100%, Rick is at the top of the list in performance of 2010 picks. Here are some more details on his 2010 picks.
Picks and Benchmark Composition:
The picks were primarily small cap. One was an emerging market stock, Perfect World (PWRD), and another was a Large Cap Growth stock, Apple (AAPL).
Portfolio and Benchmark Performance:
The portfolio returned 99% vs a 31% return of the blended benchmarks, resulting in a LikeAssets score of +68%.
Picks – Returns and LikeAssets Scores:
Open Table (OPEN), Sirius (SIRI), and IMAX (IMAX) had returns of 166%/165%/141%, all outperforming their benchmarks by over 100%. The only loser, Perfect World (PWRD) was crushed, losing 46%, 69% below the emerging market index. Nobody’s perfect.
And the performance of Rick’s 5 picks for 2010 were no fluke. LikeAssets has been tracking over 200 of Rick’s stock picks and he has achieved a return of over 100% and an overall score of 43% – the margin over the LikeAssets benchmarks.
More information on this portfolio of picks made by Munarriz can be found here.
Morningstar’s Ultimate Stock Pickers’ Stocks to Consider in 2010
These stock picks by Morningstar’s Ultimate Stock-Pickers would have been good to consider, but not to buy. With a return of 1% and a LikeAssets score of -20%, investors would have been much better off in passive index benchmarks that track these picks. Below are more details on the picks.
Picks and Benchmark Composition:
The picks were primarily Large Cap with only 2 out of 10 tracking to Small Cap indexes.
Portfolio and Benchmark Performance:
The portfolio returned 1% vs a 21% return of the blended benchmarks resulting in a LikeAssets score of -20%.
Picks – Returns and LikeAssets Score:
Genzyme (GENZ), with a return of 49% was the only pick out of ten to beat its benchmark at all, in this case by 26%. Thermo Fisher (TMO) had a gain of 16%, but that was below the benchmark by 6%. The two biggest losers, Apollo Group (APOL) and ITT Educational (ESI), lost -31%/-30%, and had LikeAssets scores of -49%/-48% below the benchmarks.
Looking at the other 90+ picks made by the Ultimate Stock-Pickers at Morningstar we concluded that, to date, they have not offered investors the ultimate in good stock picking. LikeAssets has been tracking 90+ picks of the Ultimate Stock-Pickers since 2009 and they have achieved a return of +20% but this produced an overall LikeAssets score of -9%, the margin under the LikeAssets benchmarks.
More information on this portfolio of picks by Morningstar’s Ultimate Stock-Pickers can be found here.
LikeAssets will continue to track returns for Rick Munarriz and the Ultimate Stock-Pickers in 2011, as well as other research sites, bloggers and financial media picks.
You can better understand your portfolio’s returns and alpha with the LikeAssets application now available at the Seeking Alpha app store.
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