Mid-Year Check-Up: How is the Investing All Star Team Doing?

I genuinely enjoy following Barron’s Roundtable every year (see “Shifting Winds”).  The venerable old rag puts together a team of 10 outspoken money managers and allows them to do the journalistic equivalent of a cage fight.  The participants are free to grill each other over their recommendations, and it can get pretty intense.  Some years, I like the recommendations on offer, and other years I don’t.  But it always leaves me with something to think about.

Well, we’re about halfway through 2013; let’s see how Barron’s some of the investing all-star team are doing so far.

I’ll start with the Bond King himself, Bill Gross.  Gross is having a rough ride in 2013; none of his recommendations are positive on the year.  The SPDR Gold Trust (GLD) is down 15%, and the Pimco Total Return ETF ($BOND), BlackRock Build America Bond Trust ($BBN) and Pimco Corporate & Income Opportunity Fund ($PTY) are down 0.2%, 5.4% and 2.6%, respectively.

He may very well be the most talented bond investor in history, but even Gross took a hit by the sudden spike in Treasury yields in May.  I consider it impressive that his flagship fund, BOND, held up as well as it did.  It is a testament to Gross’ skill as a manager.  Gross reiterated his recommendation on PTY, expecting 12-month total returns in the 15% range.

Felix Zulauf has one notable success—his correct call on the short yen / long Japanese equities trade—and two notable failures—his bet on gold and on emerging markets.  His recommendation of the WisdomTree Japan hedged equity ETF ($DXJ) was up 12.7% before he exited it, and his recommendations of the iShares MSCI Brazil ETF ($EWZ), iShares FTSE China 25 ETF ($FXI) and iShares MSCI Emerging Markets ETF ($EEM) were down 10.6%, 12.6% and 8.0%, respectively, before he closed them out.

Zulauf was not the only manager to be on the wrong side of emerging markets this year; yours truly held shares of FXI in my Covestor Tactical ETF Portfolio before selling in the first quarter.

Zulauf is now “long volatility” via VIX futures and recommends shorting Hong Kong stocks via the iShares MSCI Hong Kong ETF ($EWH) and shorting the Turkish, Mexican and Polish currencies.

Brian Rogers has had a nice run in 2013, and all of his recommendations are showing gains: PNC Financial Group ($PNC)—17.8%, Kohl’s ($KSS)—23.0%, Apache ($APA)—7.0%, Avon Products ($AVP)—51.3%, Legg Mason ($LM)—28.7% and General Electric ($GE)—11.6%.

Not a bad run.   Rogers reiterates his buy recommendations on all but Avon Products and adds a recommendation to the cruise line company Carnival ($CCL), which has had a run of terrible publicity of late.  Rogers considers it an attractive contrarian pick with a sweet 3.1% dividend.

Meryl Witmer also has a spotless record thus far.  Her three recommendations from January—Spectrum Brands Holdings ($SPB), Chicago Bridge & Iron ($CBI) and Tribune Company ($TRBAA)—are up 29.7%, 28.2% and 12.7%, respectively.  Chicago Bridge & Iron was a recent purchase by Warren Buffett’s Berkshire Hathaway ($BRK-A), putting Witmer in good company.

Witmer added German chemicals company Lanxess (Germany:LXS) to her recommendations.  Lanxess is largely a play on a rebound in the European tire market.

Disclosures: Sizemore Capital is long BOND. This article first appeared on MarketWatch.

Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog.

 

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