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Hulbert's 11 Stock Picks for 2016: Bullish on Buffett, Berkshire

Hulbert's 11 Stock Picks for 2016: Bullish on Buffett, Berkshire

By    |   Monday, 28 December 2015 05:30 AM


Mark Hulbert’s “Honor Roll” is out with its year-ahead stock picks. And they’re fairly bullish on the year ahead.

Hulbert relies on “a select group of advisors who have produced above-average performance in both the up and down phases of the market’s last three cycles."

Barron's reports that the advisors "have done this by either picking the best times to be more and less heavily invested in equities, or picking the stocks and mutual funds that rise during bull markets and fall less than the broad indexes during bear markets—or both.”

Seven of the 10 advisors currently on the Honor Roll recommend that we focus our energies on stock selection rather than market timing, in effect agreeing with Buffett that successful stock market timing is extremely rare over the long term. But, like Warren Buffett, they are stockpickers. One of their favorites: Buffett’s Berkshire Hathaway (BRKA /BRKB).

Spotlighting three Honor Roll advisors:

Bob Brinker’s Marketimer. Editor Bob Brinker’s stock market timing model is calling for a 100% allocation to equities, though he cautions that the “market will require corporate earnings progress in order to make significant additional progress.” Brinker has warned clients that “the bull market is beginning to show signs that it is approaching a more mature stage,” Barron's says.

Fidelity Investor. Editor Jim Lowell, who has been generally bullish throughout 2015, "allocates 100% of his most aggressive model portfolios to equities, with 80% invested in domestic stocks and 20% in international equities."

Sound Advice. Editor Gray Cardiff believes that “stocks in general are precariously high” and worries in particular about the impact that higher interest rates will have on stock prices. "While he is investing 84% of his model portfolio in equities, he is allocating the remaining 16% to portfolio hedges — for a net-invested posture of 68%," Barron's reports.

"Despite caution from Cardiff and, to a lesser extent, Brinker, the average equity allocation among these three market timers on this year’s Honor Roll is 89%."

Below is a list of stocks recommended by three or more advisors on Hulbert's Honor Roll.
  • Berkshire Hathaway ( BRKB )
  • Boeing ( BA )
  • Chevron ( CVX )
  • Gilead Sciences ( GILD )
  • LyondellBasell Industries ( LYB )
  • Pfizer ( PFE )
  • Philip Morris International ( PM )
  • Schlumberger ( SLB )
  • Target ( TGT )
  • Travelers ( TRV )
  • Union Pacific ( UNP )

Meanwhile, Goldman Sachs analysts has seen the future, at least into next year, and it's not pretty. In fact, the predictions are so dismal, Fortune described them as "incredibly depressing."

Goldman analysts forecast next year to end right about where it began, with the S&P 500 stuck at 2,100 “amid a morass of higher interest rates, the end of margin expansion and a 'bifurcated' market through which participants will have to tread carefully,” CNBC explained. 

The stock market index is already at 2,060.99 

Goldman also warned of four uncertainties that are risky for the market and investors:

  • an interest rate path different from Goldman's baseline assumption of year-end 2016 fed funds at 1.4 percent and 10-year bond yields of 3.0 percent;
  • global economic growth below Goldman's 3.5 percent forecast;
  • the U.S. presidential election;
  • various geopolitical factors
Among the stocks Goldman recommends for 2016 are Amazon (AMZN), Chipotle Mexican Grill (CMG), Whole Foods (WFM), and Wells Fargo (WFC).

"Bear in mind, Goldman is predicting a rather rare scenario. Investors don’t tend to stay down in the dumps for long. The last time stocks had two disappointing years in a row was in 2001 and 2002," Fortune reported.

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Mark Hulbert's "Honor Roll" is out with its year-ahead stock picks. And they're fairly bullish on the year ahead.
mark hulbert, stock, picks, invest
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2015-30-28
Monday, 28 December 2015 05:30 AM
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