Arne Alsin's 2002 Turnaround Portfolio

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Babak

Top Turnarounds of 2002:

Bowne (BNE:NYSE) -12
Prime Hospitality (PDQ:NYSE) -22
Dillard's (DDS:NYSE) 0 (even)
Manpower (MAN:NYSE) -4
York International (YRK:NYSE) -33
Textron (TXT:NYSE) +5
Toys R Us (TOY:NYSE) -47
Spherion (SFN:NYSE) -35
Phillips-Van Heusen (PVH:NYSE) +4
Cummins (CUM:NYSE) -28

Avg -17

The above was a list of 10 stocks named Arne's "top turnarounds" for the coming year (2002). Although they were made in early Feb (as I recall) I calculated return based on Jan 1 2002 to year end. I've made the post only in the interest of accountability.

[for those not familiar with him, Arne Alsin writes for realmoney.com]
 
i like arne but he picks stocks like cramer does. knife catching. somethine it pays off in the long run but oh the pain in the short term.
 
This guy is a flagrant self-promoter.

Earlier this Summer he decided that he would be "invogue" and do the balance sheet analysis that people were finally clammoring for after Enron, Tyco, etc., In fact, he went out of his way to "bash" an electronics defense contractor on the NYSE, by the name of LLL, but nothing became of his analysis and the company is still viewed as one of the institutional darlings of the defense sector with an "organic" growth rate pushing 12% based on GAAP standards.

He has no idea about balance sheets when it comes to the defense sector and how these companies account for "goodwill".

He simply jumped on the Balance Sheet game because it was the "flavor-of-the-month" and he saw a way to tout his newsletter.

Beware of this guy!
 
The dirty little secret of all these stock picking guru's is that the overall market accounts for 75% of any stock's movement. The sector probably accounts for most of the rest. For every analyst who has done the spadework and thinks some dog is "undervalued" there is another one who has done the same work and thinks it's a short.

Stockpicking maybe offered addded value when we were in a strong bull market. Catch a fund favorite and you did well. We are in a radically different market now. Time the index, go long or short stocks or etf's that mimic the index, get out and wait for another signal. Look at a day like Thursday. 90% up volume. Or the move from October, SOX up 80% or whatever.
 
I think the guy is a major money maker. He had a down year. Lots of people did. Look at his 2 or 5 year record. He smoked everyone else. The problem with value investing is that a stock can trade at 3-5X FCF and no one will notice it for a long long time. You just must sit there and know that you are long term. Eventually you'll bank huge. No stock can trade that low before management either buys back stock or gives a fat dividend. The only other reason, is that something is wrong with the company that you don't know. As long as you check your research, you'll come out just fine. You just need time.

I think that alsin has leaving the value field somewhat this year though. It seems like he's reaching and some more of his picks are more fairly valued in past years. Still, he is a great picker. He'll come back.
 
I read RM occasionally, and I always thought he came across as an immature know it all idiot.

It doesnt matter how great you think your picks are if you fail to notice that it is still a bear market. In a bear market, you are either out or closely timing based on the technicals. "Buy and hope-ride it out" does NOT work in that environment.

2002 was another bear market year. He missed that. If you advise bull market strategies in a bear market, you stink.
 
Quote from swtrader:


2002 was another bear market year. He missed that. If you advise bull market strategies in a bear market, you stink.
More...

What's a bear market strategy? Value investing outperformed practically any other strategy, including shorting, in 2000 and 2001. And in the bull market, value investing basically sucked in 1998 and 1999.

People tend to think bear market equals some sort of short and hold strategy. But if you look at all of 4%+ up days in the NDX since 1989, 75% of them have occurred since April 2000.

I don't think there is a clean answer here. But consistency wins in the long run.
 
Quote from Vishnu:

What's a bear market strategy?
More...

In a bear market your shorts are investments and your longs are trades. In a bull market, the opposite is true. This part is easy. Identifying which we happen to be in is the doozy!!
 
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