Had some good news recently, as I’m currently winning a stock picking contest given by the Cincinnati Business Courier comprised of 22 local money managers.
My portfolio of five stocks is up +72% a trade on average, thanks to a +234% surge in Netflix (NFLX). Second place is up +44% a trade.
I picked NFLX because the sentiment at the start of the year was so very low. In fact, it was kicked out of the Nasdaq-100 last December and as I discussed with Yahoo!Finance in January, that has been a very bullish indicator. The main reason is things can’t get any worse and any good news could see a huge spike. Well, fortunately NFLX has had a lot of good news this year.
In fact, NFLX recently won an Emmy for one of their original shows “House of Cards” and has garnered a lot of positive press for another original show “Orange is the New Black”. In the end, NFLX is the top performing stock in the S&P 500 and is a poster child for buying low expectations and how that can work out.
What about NFLX now you ask? Well, still looks good to me. I’m not smart enough to pick a top and the trend is clearly higher here. Continue to accumulate on weakness.
I also picked Green Mountain Coffee Roasters (GMCR) which has had a nice year, up +82% YTD. It, like NFLX, was kicked out of the Nasdaq-100 and has had some good news and solid earnings.
My overall markets thoughts were summarized very nicely by Steve Watkins here.
Detrick doesn’t expect the market to slump much the rest of the year. Historically, if the market starts the year strong, as it did this year, it finishes with a powerful fourth quarter, too, he said. Even with stocks struggling lately thanks to Washington’s foibles regarding the budget and debt ceiling, he expects the market to bounce back.
“We think any pullbacks will be short and sweet,” he said. “A lot of funds and institutions missed out on gains and are chasing performance. They’ll buy on any pullbacks.”
Well, we just had a scary 5% dip and just like that bounced back up to close to new highs, with the Nasdaq actually making new 13-year highs.
Here’s a list of the leaders after the third quarter. Pretty cool that Schaeffer’s has 3 of the top 5. We’re going to try to get a clean sweep by the time the contest is over!