The difficult thing about making predictions is that, at some point in the future, you need to check how they have fared. Time will tell whether your predictions really were very good.
So, with some trepidation, I have checked how my best buys of the year have progressed. Surprisingly well, as it happens.
I have worked out the numbers:
| Company | Tip Price | Current price | % change | FTSE 100 then | FTSE 100 now | % change |
|---|---|---|---|---|---|---|
| Dixons (LSE: DXNS) | 28.36 | 51.5 | 81.6 | 5925.37 | 6439.96 | 8.7 |
| Tullett Prebon (LSE: TLPR) | 253.8 | 327.5 | 29.0 | 5925.37 | 6439.96 | 8.7 |
| Apple (NASDAQ: AAPL.US) | 509.59 | 543.43 | 6.6 | 5925.37 | 6439.96 | 8.7 |
| Russian Trading System | 1526.98 | 1391.14 | -8.9 | 5925.37 | 6439.96 | 8.7 |
| Average | 27.1 | 8.7 |
Dixons
My first pick of the year was electrical retailer Dixons. At a time when retailers such as Woolworths, Zavvi and HMV went to the wall, many high-street retailer shares were crashing through the floor, Dixons included.
Yet when, at the end of last year, competitor Comet went bust, I suspected that Dixons would be a survivor, and had the potential to be one of the high street’s few big winners, and so I tipped it as a contrarian play.
My bet has paid off in spades, with the share price nearly doubling over the course of the year. I hoped that the company would successfully fuse the worlds of the internet and high-street retailing. I think it has.
It now offers big ticket products such as TVs, computers, tablets and washing machines at prices that match, and often beat, the internet. Plus there is the added convenience of trying out the products at the store and collecting the products from the store. I think this is a company that is here to stay.
Tullett Prebon
We at the Fool have often talked about the banks being one of the contrarian plays of the moment after the financial crisis. But I would say that other financials, such as insurers and brokers, are also strong contrarian plays. This is why I tipped financial broker Tullett Prebon, which seemed at the time just too cheap.
I was proved right — the shares have increased by nearly a third over the course of the year, as other investors have realised the value of Tullett Prebon shares. In fact the share prices of the brokers have risen pretty much in sync with the banks.
Apple
At the end of last year, Apple shares looked cheap — and indeed they were. But by April they were even cheaper. I admit it — I called the bottom far too early, and for much of the year Apple shares have bumped along the bottom.
I eventually lost patience and sold my Apple shares. Yet towards the end of the year they have bounced back strongly, to produce an overall 6% increase over the course of the year.
Russia
I picked the Russian stock market as I felt it was one of the cheapest markets in the world, and is the cheapest of the BRICs. There is undoubted corruption, yet the government has hardly any debt, and the country’s stock market is home to some of the world’s leading oil, gas and mining companies. What’s more, last year the country joined the WTO, and has a burgeoning consumer sector.
But the stock market has remained moribund over the past year, as Russia’s economy has disappointed. I am still convinced Russia’s value will out, but its stock market is currently in the doldrums.
Foolish conclusion
As always, some investments perform better than others. But overall, my best buys of the year have achieved a return of triple the FTSE 100. Most of my investments are contrarian and value-focused, and I think these results show that this approach works as well in a rising market as a falling market.
Next week: next year’s picks….
