2013 in Review: The Good And The Bad


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As a wise man once said, one should "Never make predictions, particularly about the future." Unfortunately, writing a daily column about markets means that, to some extent, I'm in the prediction business. In fact, on reflection, so are you, dear reader. Anybody who trades or invests in markets is, by definition, making predictions. The difference is that mine are published and archived, so I am accountable. There are around 200 of my pieces in the Nasdaq.com archive, so while some were great calls, inevitably some were wrong.

I am a big believer in accountability, so I don't shy away from that. Many market pundits seem to have a selective memory and will highlight every good call they've ever made without ever admitting that there were bad ones. I believe, however, that to do this is to do a serious disservice to one's readers. Some trades will be wrong however good you are or think you are, and understanding and accepting that is essential to survival in the market.

That is why, when I started to write about 2013 in retrospect, I decided to take a realistic view. There were some good calls and a few bad ones.


In January, I predicted that 2013 would not be a good year for gold and wrote that I expected the iShares Gold Trust ETF (GLD) to continue falling to around the 120 level. At the time it was above 160 and is now at 116.

In February, I suggested buying Enernoc (ENOC) in advance of their earnings release a few days later. That worked out as the stock jumped around 20% from around $15 at the time of publication to a high over $18 on the day following the release.

In March, I turned to my original area of expertise, and wrote that if you had missed the initial USD/JPY move from 80 to 93 you shouldn't worry; I believed it was headed higher still. We are now around 104.

In April, I took issue with a then popular view that Japan was about to collapse. Some correction was inevitable, I suggested, but total collapse was unlikely. A month later the Nikkei did indeed correct about 25%, but is now comfortably above April levels.

I didn't contribute in May as we prepared for the daily "Market Musings" column that started in June, when many were saying that a couple of down days signaled a major collapse in US stocks. I disagreed and suggested that we would continue higher

In July, Facebook (FB) caught my attention at around $25. In case you hadn't noticed, it's now around $57.

It seems obvious now that Google (GOOG) really was, as I said in August, a buy. At the time, however, GOOG had fallen for 5 straight days, was trading at around $860 and was attracting a lot of bearish sentiment.

Also in August, I upset the true believers by suggesting that Tesla (TSLA) may be a touch overvalued up over $170, given that they had never made a profit. The core of my argument was that patience was wearing thin and it was likely that the stock would overreact to any bad news that came along. I guess losing 40% over two months in reaction to stories of impact related fires qualifies.

In September, although many were saying that JC Penney (JCP) represented value at around $13, I advised caution. For the record, I don't believe the stock is value even now at around $9.

In October, I concluded that negative reaction to Yahoo (YHOO)'s earnings was overdone, and that, at around $32.50 the stock was a buy. YHOO has appreciated around 25% in the last two months.

In November and December there were several specific calls that are looking good, such as Chelsea Therapeutics (CHTP), but it is really too early to decide an outcome of any of them.


At the start of 2013, I made one of my worst calls of the year. I suggested that it would be a decent year for emerging markets. All I can say is that I'm sorry and, if you happened to follow that piece of advice, I hope you also followed my advice to use stop losses!

In the second half of the year, I began to turn from bear to bull on gold. That was a little early to say the least, and, talking of early, I also suggested taking some profit on Facebook at around $45.

Earlier in the year, in March, I had become pessimistic on a previously loved stock, Clovis Oncology (CLVS). My sense that a price around $30 was a bit rich was based on sound logic, but looked a bit silly as CLVS continued to climb to a high over $86. It has corrected some since, but still...

I was, and remain, pessimistic regarding Twitter (TWTR), at least until they demonstrate an ability to make a profit, but the stock keeps soaring...

I am sure I could find others, but to be honest, trawling through one's collected works looking for where you made a total fool of yourself is a little depressing. The point is that, while on balance I had a good year, not everything was right. It never will be. Accepting that simple fact makes it easier to accept when you are wrong, and therefore to cut for a reasonable loss. That, in turn, means that you live to fight another day.

If you are an equity investor and informed enough to peruse these pages, then the chances are that you had a pretty good 2013. I hope you did, but even more than that, I hope you have a spectacular year in 2014!

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas , Stocks , US Markets

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