PALO ALTO, Calif. (CNN/Money) -
Accountability. It's the new watch word on Wall Street. But it's always been a hallmark of this column. When you opine for a living, you'll get some right and some wrong. The former deserves some humble throat clearing. The latter requires a 'fessing up. So here's my self-written report card for 2002.
One thing I got right from the start of the year was the HP-Compaq merger. When the financial world assumed that puppy was finished, I suggested in January that the deal wasn't yet dead. Most folks underestimated the power of incumbency that Carly Fiorina enjoyed. Watch for that battle to be re-lived in the media early next year, when books by two business journalists, George Anders and Peter Burrows, hit bookshelves.
In the blissful days of February, many hoped that Enron was an isolated example of corporate malfeasance. But I predicted that once companies started filing their annual reports with the SEC there'd be plenty more Enrons. "Don't be surprised to find that companies you thought had great earnings in years past -- supporting still-high P/E ratios -- confess that past results weren't so great after all." That was before Adelphia, Tyco, WorldCom and AOL Time Warner stated, re-stated and re-restated their results. (AOL Time Warner is the corporate parent of CNN/Money.)
Over in the goof category was a mid-February assertion that airlines might be a good investment. True, that was a good trade -- for about a month -- with the American Stock Exchange Airline index (Charts) rising 26 percent in the four weeks after I guessed that airlines would recover from their post-9/11 funk.
But if you didn't take your winnings and walk -- no, run -- away from the table in early March, your investments crashed and burned. Today, the airline index trades for about 58 percent less than it did in the hopeful days of February, hurt most of all by UAL's bankruptcy filing.
While I'm bashing me, I didn't help anyone with a negative review of PayPal's IPO. The stock never tore it up, but eBay bought PayPal for a healthy premium. eBay clearly saw something in the online payments service that I didn't. Perhaps a fair generalization might be that a company with the wherewithal to come public in a brutal market must have something going for it.
I began doubting tech blue-chip Intel in March, by asking "Is Intel's run over?" The stock closed that day at $31.25, and has since dropped 45 percent. The Nasdaq composite has fallen 26 percent in the same timeframe.
Kudos to J.P. Morgan Securities analyst Eric Chen, whom I quoted that day advising clients "that shares of Intel could retest the mid-to-high $20 range during (the second quarter)." I've taken a lot of heat throughout the year by quoting a source with a $7 price target on Intel. The stock's not there yet. But it's trying.
Come May, I was doubting the Cisco recovery in which everyone wanted to believe. The stock's down almost 20 percent from what I termed then a sucker's rally.
In July I attempted to identify a handful of stocks you can trust. My goal was simple: Look for companies you could trust and hope their stocks weren't already too expensive.
The small winners of the group were Procter & Gamble and Caterpillar. Illinois Tool Works didn't hurt much, but Quest Diagnostics and Nike would have damaged your portfolio so far. Overall, the five-stock basket was down an average of 7.5 percent, almost exactly the same as the S&P 500's drop since then. Still, these picks weren't overly trustworthy.
Finally, a jury's-still-out column, my September trashing of bond investor Bill Gross's Dow 5000 call. The Dow's just a little bit above where it was then; the S&P 500 is almost exactly the same.
| Recently by Adam Lashinsky
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I pointed out then that Gross was comparing the market to a day when dividends were far more popular than they are today. If Washington alters dividend policy next year and cash-rich tech companies start issuing them, then perhaps Gross's theory truly will be tested. For now, I think -- and hope -- that Dow 5000 is a minor fear.
Okay, that's my review of me. Send in your picks and pans of this column, and I'll end the year Monday with a representative sample of what you think of my scribbles. In the meantime, everybody should go shopping this weekend. The economy needs your help!
Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at lashinskysbottomline@yahoo.com.
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