Monday, December 13, 2004

Big Bets

Every Autumn we have 17 equity experts--some bulls, some bears--test their mettle against the S&P 500. They get one pick and 12 months to either beat or lag the index. Those who succeed stay in the contest for the next round. Only a handful of the experts from our recently concluded contest have reason to brag. On average the five shorts skidded past the market's 8% rise since October 2003 with a 55% gain. Bearish pick Research in Motion, which rose 300%, did most of the damage.

Nor did the bulls deliver. Their 12 picks collectively finished in the black but still fell shy of the S&P 500's advance by three percentage points.

The best among the bears was Clarion Group's Morton Cohen. Last year he warned of trouble at Bradley Pharmaceuticals, which fell 38%. For 2005 he puts the finger on Travelzoo, an online aggregator of travel deals. It's an easy business to get into, Cohen says. He thinks that Travelzoo faces threats from upstarts below and giants like Yahoo above. And the stock doesn't look cheap at 90 times projected 2005 profits.

Full story at