Barron's Round Table.

Each year Barron's magazine publishes a three part round table series where they interview some of the "wise old men and women" of the investment business. It is usually early in January and published serially later in the month. Along with their prognostications and picks for the coming year, Barron's also  gives the performance of the stocks recommended by the participants from last year. We published a review of how they did last year.  Here is a link to that post:  Barrons 2009 Round Table Review  Here is how they did this year.

Collectively as a group last year they made 83 specific recommendations.  On a collective basis these returned 43.78% which handily beat the S&P 500's 26.5% return.  However, it is not clear to me whether some of the investments sited in this article could have been purchased by the average investor.  For example Felix Zulauf last year recommended the purchase of crude oil.  That investment would have returned 71.3%.  However it's pretty hard for the average investor to buy crude and the ETF which tracks oil (USO) has a pretty poor record of tracking the commodity.  Mark Faber had the most picks (29) and the best performance-up 77.46%.  He also used the most ETFs A third of his picks were specific asian companies that would have been hard for the average investor to duplicate.  Bill Gross outperformed by suggesting only bonds or bond ETFs-which are his firm's speciality.

What did stand out for me was the diversity of investments away from classic portfolio stock selection.  Close to half of the managers interviewed last year used ETFs.

Four of the ten managers underperformed the market.  (Scott Black, Abby Joseph Cohen, Archie MacAllaster & Oscar Schafer)   MacAllaster also significantly underperformed the market in 2008.  Gabelli returned over 29% but on a risk adjusted basis may have done no better than the market given the nature of some of his holdings. 

While I haven't seen the final numbers yet for 2009, a simple review of the charts shows that an investor at the beginning of 2010 who would have put 100% of his money equally into two ETFs-the S&P Spyder {SPY} & the Nasdaq 100 composite {QQQQ}-would have returned just under 40% last year.  Only three of the 10 managers reviewed by Barrons beat that number.  Again both Zulauf and Faber did so by investing in ways that may not be able to be replicated by most investors.  Faber however would have still outperformed. 

Again like last year I would point out that collectively these managers employ at least hundreds of people many of whom do nothing each day but analyse securities.  Most can probably call companies up on the phone and speak to somebody pretty high in the chain of command about business. They still for the most part did no better than a simple ETF strategy.

*Long ETFs related to the Nasdaq 100, Nasdaq Composite and S&P 500 in client and certain personal accounts.