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Happy New Year 2011 !

Happy new year to all my readers ! It is your feedback (as comments as well as in person) kept me going with my almost weekly blog. It helps me personally to articulate my thoughts and also make personal investment decisions - thanks to all of you !


Year 2010 is over. It's time to reflect on past year and get ready for new year.


Let's start with how my recommendations in 2010 did. If you are regular reader of my blog, along with my commentary on markets, politics, economics and occasionally on other events (like World Cup), I have made stock recommendations in almost every post with target buy prices. Assuming one does around $1000 investment in those recommendations at target buy prices, the portfolio would have returned approx. 17.77% for year 2010. Though it is not as stellar as last year's performance of 80% , it still beat S&P by 5%. Not bad considering till Nov, it was lagging S&P by couple of percentage points.


Here are top 3 winners and losers of last year's recommendations:
Winners:
  1. Atlas Pipeline Holdings (AHD): Gain 170%
  2. SFI Preferred (SFI-PD): Gain of 170% (including dividends)
  3. Crosstex (XTEX): Gain of 63%
Losers:
  1. Allied Irish Bank (AIB): Loss of 77%
  2. General Maritime (GMR): Loss of 53%
  3. Bank of Ireland (IRE): Loss of 42%
Overall out of 39 recommendations which I tracked as "shadow" portfolio, there were 27 with positive returns and 12 with negative returns. For every loser, there were three winners. I am satisfied with my recommendations and returns for 2010.
Now that is past - let's look at 2011.
Year 2011 is starting with lot of optimism in the air and quite a bit of momentum in economy as well as markets. There are still clouds about Europe, Japan and to some extent US growth and unemployment. However general sentiment is much better than at start of 2009 and 2010.
Here are some market predictions:
  • US indexes would cross following milestones in 2011:
    • DOW: 12500
    • S&P: 1340
    • Nasdaq: 3000
    • 10-year treasury yield: 4%
    • Unemployment: Below 9%
  • Emerging markets would continue to do well with Shanghai index crossing 3300 and Mumbai BSE index crossing 23000
  • Other major indexes
    • FTSE to cross 6200
    • Nikkei to cross 11000
    • DAX to cross 7500
    • Hongkong Index to cross 26000
Here is my first stock(s) recommendation of 2011

I am going back to my investment thesis of finding "out-of-favor" sectors and potential catalyst. At this moment, I see for-profit education sector has most upside potential of 2011. With republicans gaining control in congress, it would slow down potential regulatory impact on these companies which is not fully reflected in their stock prices. With this in mind, here are stock(s) recommendations with potential of 30% plus gains in 2011:
  1. COCO at $5
  2. CECO at $20
  3. APOL at $39
That's all in my first blog of 2011. Once again, happy new year to all of you, your friends and families !

/Shyam

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