By Shawn Langlois, MarketWatch
Look east for outperformance
Accuracy rating: 6/10
After the initial “Trump bump,” there were many fearing a pullback. With that in mind, DoubleLine Capital’s “Bond King” Jeffrey Gundlach said to look to Japan. Specifically, he said to consider the WisdomTree Japan Hedged Equity Fund /zigman2/quotes/203865992/composite DXJ -1.11% to gain exposure to the country’s growth. Since then, the fund has rallied more than 19%, so he gets good marks for that solid return. Then again, it’s not exactly trouncing the S&P 500’s performance /zigman2/quotes/210599714/realtime SPX -0.01% , so it’s not quite the better option he made it out to be. Still, a win’s a win.
Viva la Mexico!
Accuracy rating: 7/10
Steven Jon Kaplan of the True Contrarian blog was feeling bullish on Mexico due to his belief that the media hype about Trump ruining the country weighed irrationally on the market. So he said to buy the iShares Mexico ETF /zigman2/quotes/203022585/composite EWW -1.75% . “As a useful rule of thumb, when deciding between investing in various countries, favor those with the most illogically oversold currencies, because those will consistently produce the greatest profit increases under most circumstances,” Kaplan said. “That is especially true if the country has a long-term track record, as Mexico does, of outperforming most other global markets in recent decades.”
Shortly after his call earlier in the year, that ETF outperformed for the better part of the year. Recently, however, it’s lost ground and now lags the broader U.S. market. Still, Kaplan is up about 20% since his purchase, so he deserves some credit.
Alibaba vs. FAANG
Accuracy rating: 9/10
The FAANGs were having a relatively weak stretch during the late summer when TipRanks offered up a high-tech alternative: China’s Alibaba /zigman2/quotes/201948298/composite BABA +5.39% . The reason: Hedge-fund notables, led by the likes of David Tepper and Daniel Loeb, were loading up. While FAANGs went on to notch some nice gains, they didn’t keep up with Alibaba, which almost doubled from that point.
Time for gold to shine?
Accuracy rating: 2/10
Gold got a boost as a safe-haven option back in August, when a missile launch from North Korea over Japan and Hurricane Harvey’s mounting toll had investors feeling jittery about the state of things. Trader Petros Steriotis predicted the spike in demand would help carry gold up to $1,375. There was a short-lived rally after his call, but gold never got to that level. And since then, it’s suffered a steady drop to where it sits now at around $1,310.
Commodities rally, 2.0?
Accuracy rating: 5/10
Canaccord Genuity strategist Martin Roberge pointed to imminent rate hikes by the Bank of Canada in the middle of the summer as a trigger for a rally in commodities stocks. “While Commodity Rally 1.0 in 2016 was driven by US$ depreciation, we believe Commodity Rally 2.0 will be more fundamentally ‘demand’ driven,” he wrote. Roberge said investors should overweight their portfolios with energy /zigman2/quotes/206420077/composite XLE -0.55% , materials /zigman2/quotes/204467551/composite XLB +1.27% and industrials /zigman2/quotes/202026558/composite XLI +0.80% . Meh. Investors would have fared OK if they had listened to his advice, but they would have slightly lagged the S&P.
Amazon $1 trillion
Accuracy rating: 7/10
This one still has a ways to go, but Scott Galloway’s “Amazon $1 trillion” is well on its way. The NYU professor says the Seattle giant will become the first-ever company to reach that market cap. He says Amazon /zigman2/quotes/210331248/composite AMZN -1.10% declared war on conventional brands, changed the relationship between a company and its shareholders, and deployed Alexa (its voice service/digital assistant) in clever ways.
“Alexa and Amazon have conspired and figured out that voice is a way to pull brand and some of the traditional mechanisms and accoutrements of brand-building out of the ecosystem, and then slowly but surely take control of your preferences,” Galloway said. Amazon’s market cap currently sits at $563 billion, having added more than half its value since the beginning of the year.
A bet on Nvidia is a bet on AI
Accuracy rating: 10/10
This one was a clear home run. Jefferies analysts told investors looking to make money on the artificial intelligence trend to bet on hot chip-stock Nvidia /zigman2/quotes/200467500/composite NVDA -1.41% . The shares were already up nicely for the year when they made this call, and are up 80% since the end of March. “Artificial intelligence and deep learning will be among the most important investment themes in the next 3-5 years,” Jefferies said, pointing to Nvidia as the de facto standard in AI.
Accuracy rating: 4/10
In the fall, Greg Guenthner of the Daily Reckoning blog said small-caps were set for a fourth-quarter surge. This “trader’s paradise” is just warming up, he predicted. “The market’s changing before our eyes. Most investors will be caught off-guard. Don’t be one of them,” he wrote. “Pay attention to the signs of market rotation, and you’ll continue to rake in consistent gains as the market preps for a potential fourth-quarter melt up.” While the Russell 2000 /zigman2/quotes/210598147/delayed RUT +0.63% is up since his call, there’s hardly been a “melt-up” to this point. Perhaps he was a little early.
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