Following 007 takes courage - but here goes!

Posted Dec 29th 2006 3:32PM by Sheldon Liber
Filed under: Forecasts, Rants and Raves, Time Warner (TWX), Home Depot (HD), China, Market Matters, Getting Started, Next Big Thing, Columns, Duke Energy (DUK), Dow Chemical (DOW), ETF Investing, Valero Energy (VLO), PetroChina Co Ltd ADR (PTR), Huaneng Power Intl ADS (HNP)

Yesterday I put my reputation on the line by recommending seven stocks that I think will outperform the market in 2007, You don't have to be 007 to find the best picks for 2007!. In the past few years I have made some great calls and doubled, sometimes even tripled the market averages, helped along by stocks like PetroChina, (NYSE: PTR) acquired for $44 and closing yesterday $142.12; Intuitive Surgical (NASDAQ: ISRG) acquired at $7.70 and closing yesterday at $96.73; Merck (NYSE: MRK) acquired at $32.00 rising to $43.55, and Time Warner Inc. acquired at $12.10 and settling in last night at $22.00. There were many others.

This all followed the same disastrous 2001 collapse that most investors suffered. I wish I would have listened to James Cramer when he told me in a personal email that telecom stocks were going down hard. Like any of us, he is not always right -- but he was way right about that!

It has been said, and is worth repeating,"experience is what you get when you were expecting something else." We all got way too much experience in 2001. Since that time I have recovered all of my losses and then some, but it took a lot of work, a lot of study, and certainly some luck. Let's just say I'm older and wiser.

In making yesterday's recommendations I tried to stay away from get rich quick notions and chose stocks that I believe have strong upside potential with protection against downside risk. All seven of my 2007 picks are well known companies to most stock market investors. They are all companies that I feel are buy and hold propositions.

Here are the closing prices as of December 28, 2006 of the seven stocks I recommended:

The Dow Chemical Company (NYSE: DOW): $40.02
Duke Energy (NYSE: DUK): $33.02
The Home Depot Inc. (NYSE: HD): $39.73
Huaneng Power International ADS (NYSE: HNP): $36.00
PetroChina ADR (NYSE: PTR): $142.12
Time Warner Inc. (NYSE: TWX) $22.00
Valero Energy (NYSE: VLO) $51.61

I will report back each month with the closing stock price as of the 28th of each month. If I am wrong it will be very public. Although I did not recommend jumping in each of these stocks at these prices immediately, I will use them for tracking purposes, come what may.

Disclosure: I own shares of DUK, HNP, PTR, TWX and will likely own DOW, HD, and VLO prior to next months report.

Happy New Year!

Check out my other posts for BloggingStocks here.

Lets discuss your picks for 2007

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm.

Tags: China, Dow Chemical (DOW), DowChemical(dow), Duke Energy (DUK), DukeEnergy(duk), Home Depot (HD), HomeDepot(hd), Huaneng Power Intl ADS (HNP), HuanengPowerIntlAds(hnp), James Cramer, JamesCramer, PetroChina Co Ltd ADR (PTR), PetrochinaCoLtdAdr(ptr), Sheldon Liber, SheldonLiber, Time Warner (TWX), TimeWarner(twx), Top Picks 2007, TopPicks2007, Valero Energy (VLO), ValeroEnergy(vlo)

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Reader Comments (Page 1 of 1)

12-29-2006 @ 2:41PM

Gary Rains said...

Here is why Home Depot is destined to fail!

Home Depot is God, just ask them! We ordered a door and they lost the order. We ordered a bathtub, and they couldn't find it AFTER it was received. We ordered carpet, and two days AFTER it was suppose to be delivered they called to tell me it had been back ordered. It took 5 phone calls to get them to cancel the order. And they still billed me for the stuff. Then it took another 10 phone calls to get a credit. And we are still not done...they charged me a re-stocking fee even though they promised they wouldn't!

I've called President's [Nardelli's] office, no return call. I've called The Dalles branch manager [Robert Tilton], no return call.

They cannot run a store without customers. I bought over $50k in appliances, fixtures, plumbing and the like, so if they treat me like this, then good luck!

Buyer beware. Home Depot has gone from a good company to one that just doesn't give a damn!

12-29-2006 @ 2:54PM

Anil Khosla said...

Home Depot: Stock has competitive yield. But do not buy at current prices. I also had similar experience about three years ago when we got blinds from HD in 2003. Home Depot needs to be more efficient and be able to track goods and services to customers more accurately.

I do not own HD stock. You buy at your own risk.

12-29-2006 @ 3:15PM

Sheldon L said...

Gary, Anil:
You make very valid points and I am not one to credit HD for it's deteriorated service. However, this is an accepted fact and not new information. It has had plenty of time to be factored into the stock price. It is very likely a large contributing factor to the poor showing for same store sales and caused the depressed stock price...but a depressed stock price it is...and thus the value.

12-29-2006 @ 9:55PM

Jerry Bluhm said...

Home Depot will not beat the market in my opinion. In 2008 it may happen. The housing start slow down has not been felt to much extent yet but it will in 2007. Also, if commodity prices drop that will have an affect on the total revenues HD will have if housing is still slow in 2007. 2007 could be the year the consumer stays home without fixing the home up.

12-30-2006 @ 1:21PM

Harlan Gustafson said...

I am an old investor, and read with very much interest the comments on HD, Home depot, and they are so right, but, they forget that the best time to buy into any stock is when the blood is running in the street, but I see light at the end of the tunnel, and major progress being made, so I feel, as several others, that this is the best time to buy into HD, rather than later, when the train has left the station,so, I now have 5% of Home Depot in my portfolio