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Adios 2016;Happy New Year 2017!

As we say Adios to 2016 and welcome new year 2017, it's time to take stock of 2016 recommendations done in first blog-post of 2016 and come up with new recommendations for 2017.
So here is report card of 2016 recommendations. In all, I recommended 16 stocks at start of 2016 with very clear indication that these are not for normal investors since they reflect my aggressive style of investing (after all blog is called "seeking alpha"). In all out of 16 recommendations, 6 were negative and 10 were positive. Losses range from 100% for LNCO, 94% for SUNE to 35% for FOLD. Gains range from 160% for VEDL, 144% for CHK-PD to 14% for OIL. In all assuming approx equal amount was invested in all 16 recommendations, the portfolio would have returned 28% not counting any dividends etc. This beats S&P by approx 18% which seems to be overall good performance. Of course it came with extreme volatility especially during months of Feb and Jun (around Brexit time). So as I have mentioned, these recommendations are NOT for risk-averse investors.
Now let's look at what's ahead for new year 2017. Here are some macro predictions.

  • DOW would finally cross 20K in Q1 and go on breaking 21K by year end.
  • S&P would break 2400 by year-end
  • 10-year treasury yield would hover between 2-3%
  • US unemployment would remain below 5%
  • OIL would be between $40 to $65
  • US tax-reforms would bring down both corporate and individual taxes thanks to Trump and GOP controlled congress
  • Merkel would win her 4th term as Germany's chancellor
With this macro background, here are 17 recommendations for 2017
  • Technology/Telecom/Solar: AMD ($11), MU ($22), VOD ($24), SPWR ($6.5)
  • Energy: CRC ($20), LGCYO ($7.5), REN ($39), SUN ($26), ETE ($19), CVRR ($10), SN ($9), MRO ($17)
  • Biotech/Pharma: PTCT ($10.80), ENDP ($16), VRX ($14)
  • European Banks: DB ($18), BCS ($11)
As you can see, most of the picks are either in Energy, Biotech or beaten down stocks like European banks or Valeant/Endo type possible turnaround candidates. All of these are very aggressive picks and high-beta stocks so my usual disclaimer (do your own research before investing) stands.
Wish you all Happy, Healthy and Prosperous New Year 2017!
/Shyam


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