With the booming Aussie dollar, The Australian Financial Review is once again staking its claim to be the world’s most expensive financial daily newspaper.
However, the $2.70 paid for the January 5-6 weekend edition appears to have been money well spent for speculative investors after the paper splashed its front page with “20 stocks to watch in 2008” and then claimed its journalists had unearthed shares that “could provide some extra gains”.
Front page stock tipping is not what you expect from The AFR, which made its name with weighty economic commentary and big corporate news.
With a portfolio now exceeding 500 shares, I was expecting to already own most of the paper’s best tips, but it seems my focus is too blue chip as only two of them rated a mention. The AFR’s Perth-bureau did most of the legwork, so the recommendations were decidedly small fry with a bias towards resource stocks with operations in politically risky countries.
More than half of the recommendations were capitalised at less than $100 million and the average was $188.5 million, but the really interesting thing was what this front page treatment did to the share prices yesterday when $34 billion was wiped from Aussie market.
The average fall for the 2200 listed securities was 2.3% but, would you believe it, only 5 of the stocks tipped by The AFR fell.
Indeed, 8 of the 20 rose by more than 2.3% – a relative gain of 4.6% on the day – and the best performed stock was Sundance Energy which surged 11.11%.
I bought three of the recommendations yesterday and a further three this morning and will be watching their performance like a hawk for the rest of the year. Moving markets in the short term is a great thing for any analyst or journalist to claim, but the long term quality of the advice is what really counts.
How The AFR’s Top 20 tips for 2008 performed in yesterday’s bear market
Sundance Energy + 11.1%
Coal of Africa +10.5%
Avastra Sleep +7.1%
Vulcan Resources +5.7%
Fermiscan +4.4%
Style Ltd +4.3%
Brockman Resources +4.1%
Reckon Ltd +3.9%
Zicom +3%
Gryphon +2.9%
Impact Capital +1.6%
Albidon +1.2%
Greencross +0.6%
Centamin Egypt +0.3%
Data3 steady
Image Resources -0.6%
IMX Resources -0.7%
Breakaway Resources -2.5%
Adamus Resources -3.5%
Conquest Mining -4.6%
In today’s Mayne Report video we take our hat off to The AFR’s four brave stock tipping journalists.
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