Monday, January 18, 2010

Hated Stocks Beat Loved Stocks (John Dorfman)

For 11 of the past 12 years, I have studied the performance of analysts' four favorite stocks, and the fate of the four they most scorned. My analysis covers 1998 through 2009, except for 2008, when I was temporarily retired as a columnist.

Their favorites, on average, were flat during those years while the four stocks they hated most gained about 6 percent annually. The Standard & Poor's 500 Indexhad an average gain of about 9 percent.

Last year was particularly good for the despised stocks. Led by Sears Holdings Corp., they rose 47 percent compared with 23 percent for the analysts' favorites.

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