This has become an interesting annual exercise where I track stocks recommended at the end of the year by the various research houses from big investment banks to brokerages. After all, there are the folks with high-powered research teams equipped with bloomberg terminals. You would expect them to outperform the simplest way you could invest, i.e. buying the index.
Recap of how the professionals did in 2019
Here’s how the professionals did.
The 13 research teams I tracked recommended a total of 98 stocks (with overlaps). If you had invested equal amounts of money in their stock picks, you would have made 6.4% in 2019. That’s less than half the NIFTY’s 13.6%.
Within the 13 portfolios there is a fair bit of divergence. 3 of the 13 research teams beat the index. Morgan Stanley, Centrum Broking, and Standard Chartered. Two of them, Macquarie Research, and CLSA are down for the year. The remaining are somewhere in the middle.
Before you conclude that the top performers in this table are the “best stock pickers” and the others should probably find other professions, consider what they recommended back in Dec 2018:
Morgan Stanley’s 2019 Picks (Overall +19.8%)
Centrum Broking 2019 Picks (Overall +14.2%)
Macquarie Research 2019 Picks (Overall -22.9%)
CLSA 2019 Picks (Overall -11%)
The complete list of recommendations from all 13 research teams is here.
Hindsight is a fantastic thing. But realistically, back in Jan 2019, would you have reacted differently to the first two sets of recommendations versus the next two?