Stocks for the next decade? Check out these predictions from 2000 first.
Back in 2000, The New York Times asked 10 stock experts for their buy-and-hold picks for 2010. Here's a look at how they fared.
This is the time when people make impossibly bold predictions, like Best Stocks for the New Decade and 20 to Hold through 2020.
But before you click over to your broker's website, consider this cautionary tale.
In early 2000, The New York Times asked 10 eminent investors to make their predictions for stocks to buy and hold through the year 2010. It seems almost quaint today. Everyone was worried about "Y2K" computer glitches but no one had heard of Osama bin Laden, the dotcom crash, IEDs, subprime loans, Barack Obama, Google, Twitter, or the "great recession." TARP was something you used on a camping trip. Sept. 11 was just another day.
So the future, in many ways, is unimaginable. What's remarkable about the following list, then, is that some of those stock picks were right.
1. Bill Nasgovitz, Heartland Value
Pick: Henry Schein Inc.
Back in 2000, health and dental supplies distributor Henry Schein was trading at about $13. Today, it's up 300 percent to $53.42. "We need more and more dental care, not only in the U.S. but worldwide," Mr. Nasgovitz told the Times. That ka-ching you just heard? The sound of forecasting glory.
Pick: Waste Management
Mafia jokes aside, who knew taking out the trash could be so lucrative? Over 10 years, the least sexy pick of the 2000 litter almost doubled in value to $33.84. Noting that WM had only three major competitors and no exposure to technological or Internet-based bubbles, Mr. Miller's bet on value and endurance paid off.
3. George A. Mairs III, Mairs & Power Growth Fund
Mr. Mairs said he was comfortable holding shares "for years, even decades" back in 2000, and Medtronic was a good choice for the next 10 years. Even in the market's darkest days, Medtronic stayed a brisk few pegs ahead. It didn't soar like competitor St. Jude Medical or even have a several-year run of glory through the middle of the decade like Boston Scientific, but it ended the decade ahead of the latter and stayed strong throughout.
1. Laszlo Biriny, Deutsche Bank
Returns on Finnish cellphonemaker Nokia were over 3,600 percent in the 1990s, and while Mr. Biriny didn't forecast growth along that scale, he did expect the stock to continue to grow. And grow it did. But it also collapsed – twice. Between 2000 and 2009, it lost two-thirds of its value to end at about $13 per share. Facing stiff competition from big firms that weren't even on Nokia's radar screen back in 2000 (Google, Apple), the company is in a tough fix.
2. Liz Ann Sonders; Campbell, Cowperthwait
Pick: JDS Uniphase
"They are the dominant player in terms of scale and size, and their earnings will grow at a 50 percent annual rate over the next three to five years," Ms. Sonders predicted. JDS didn't even make it 12 months before collapsing along with the tech bubble. By the beginning of 2010, a share was worth $8.96, down – brace yourself – 98.5 percent from its 2000 high. Over the same period, JDS was bested strongly by competitor Agilent Technologies.
3. Roger McNamee, Integral Capital Partners
Pick: Flextronics International
The rationale was simple. Mr. McNamee reasoned that the stock would survive because it's cash flow was tied to giants like Cisco. But as Flextronics took a dive in 2002, competitor Jabil Circuit soared. Flextronics stayed below the market and ended worth roughly 65 percent less than its 2000 value.
1. John W. Ballen, MFS Emerging Growth Fund
The database and software giant stayed strong over the last 10 years, inching up in value by 2 percent. Considering inflation, investors would have gotten better returns from long-term bonds or CDs. Mr. Ballen was spot-on with some of his analysis back in 2000, though, predicting that Oracle's astronomic 125:1 ratio of sale price to next year's profits back in 2000 would come back to earth as the company's sales spiked. In 2010, that ratio is 21.3. Considering all that the market has been through, a 2 percent gain is far better than falling-off-a-cliff losses that many sustained.
Pick: Zee Telefilms
Betting on Indian consumers' increasing appetite for television was a good one, but Zee Entertainment didn't quite keep up with the rest of the Indian stock market until October of 2009, when the rest of the world was still staggering financially. Going forward, India's powerful growth might bear Zee along to bigger things. For now, its late surge moves it from bust to even.
3. Robert E. Turner, Turner Investment Partners
Pick: Cisco Systems
Solid but unspectacular, the networking giant survived the most recent financial downturn largely unscathed, which speaks well of Cisco's staying power, the element of value Mr. Turner highlighted back in 2000. It spent the decade much more stable through time than competitor Juniper Networks and outperformed competitor Alcatel-Lucent.
4. Ralph Wagner, Acorn Fund
Pick: Jones Apparel Group
"I think women will be wearing clothes 10 years from now, and Jones Apparel will be making their fair share of those clothes," Mr. Wagner said at the time. Well, they are certainly still wearing clothes. But Jones Apparel isn't doing very well at making money off the trend.
A Berkshire Hathaway darling at the turn of the century that tanked in the most recent economic troubles. For most of the last decade, Jones Apparel was beating the market by a few points each year. But starting in 2007, the company began a slide downward, landing down a third of its 2000 value. It's catching back up to the market, however.