2011 Wrap Up
Jan 5, 2012
Posted by Jody Eisenman | Filed under Uncategorized
Although it would seem that 2011 was basically a non-event for stocks, it would seem that the swings really hurt many professional investors. Returns for a few key indexes were as follows:
DJIA +5.5%
NASDAQ -1.8%
S & P FLAT
Russell 2000 -5.5%
Anecdotal stories among brokers and investors indicate to me that most people lost money. I believe the reason why was because the market was sort of trendless. Just when you thought we were in an uptrend, we would selloff. Then, when it looked like the market was falling apart, we would rally. I think a lot of people got whipsawed in and out and it cost them plenty of money. According to Hedge Fund Research most funds lost money, including some notable names like Bill Gross and John Paulson. On the plus side, James Simons from Renaissance and Ray Dalio from Bridgewater had excellent years. Speaking of Bridgewater (which manages over $120BB); they remain quite bearish for 2012. They have done well for investors by maintaining a bearish stance on the global economy. On the other hand, Citicorp believes that we are now in a ten year secular bull market. Opinions are like brains, everyone’s got some.
Finally, in a sign of the times, it seems that 131 year old Eastman Kodak may be on the verge on bankruptcy. EK launched its’ first camera at the end of the nineteenth century and went on to dominate the film industry. As late as 1997, shares traded as high as $90/share. Today, will everything moving to digital film, EK no longer has much of a business. EK shares closed yesterday at 47 cents. This is the nature of the world, with new industries being created to replace obsolete ones. However, there is no question that change is accelerating at a rapid rate. I like to tell my employees that virtually everything I use in my office (wireless, fax, personal computer, email, digital TV, etc) barely existed 20 years ago. If you want to read an excellent book on this trend, please read (maybe on your Kindle!) Future Shock by Alvin Toffler. The book was originally written in 1984, and it is all the more true today. I highly recommend it!
January 9th, 2012 at 8:26 pm
The year 2011 was filled with unpredictable fluctuation. If Bridgewater is bearish for 2012, do you think that this year will reminisce last years trend? Maybe last years unpredictability can help predict this year. I wonder…