CFA SOCIETY OF NASHVILLE
2008 Forecast Contest
The group was optimistic, with 82% of entries forecasting a higher close. (This excludes two
entries that forecast a close in the range of 1250-1500 – we hope they were thinking of the S&P
The average forecast was for an 11.0% increase from the 12,182.13 close on Feb. 8, with a
range from 11,381 (-6.6%) to 15,001 (+23.1%). The 2007 close was 13,264.82.
-10% +10% +20%
<1500 11000 12000 13000 14000 15000
10-YEAR BOND FORECAST:
The group forecast a range from 3.00% to 5.15% for the 2008 close, compared to a 2/8/08 close
of 3.65% (2007 close was 4.03%). One-third of the entries forecast a lower yield at the end of
2008, while two-thirds thought yields would rise.
3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 5.0 5.1
Compared with a 2007 close of $91.90, 62% of the entries forecast a decline and 38% forecast
an increase. The range was $54.67 to $128.00, with an average forecast of $84.91.
-40% -30% -20% -10% +10% +20% +30% +40%
$50 $55 $60 $65 $70 $75 $80 $85 $90 $95 $100 $105 $110 $115 $120 $125 $130
LONG AND SHORT STOCK PICKS:
The stocks selected as long or short picks are listed below. Those with numbers next to them
were selected by multiple entrants.
Beazer Homes was the only company on both lists.
Long picks: Short picks:
BZH Beazer Homes AGN Allergan
BIDZ Bidz.com ABK Ambac Financial
CSIQ Canadian Solar AAPL Apple Computer (2)
CHLN China Housing & Land Development ADM Archer Daniels Midland
CN China Netcom Group Corp. ARMHY Arm Holdings ADS
CMCSA Comcast Cl A BIDU Baidu.com
CZZ Cozan Ltd ABX Barrick Gold
BOOM Dynamic Materials BZH Beazer Homes
FHN First Horizon (2) BONT Bon-Ton Stores
F Ford Motor CMG Chipotle Mexican Grill (2)
GERN Geron CC Circuit City Stores
INPH Interphase Corp DSL Downey Financial
JAX J.Alexander's FDO Family Dollar
KERX Keryx Biopharmacuticals FSLR First Solar (3)
LM Legg Mason FCL Foundation Coal
MBI MBIA GHS Gatehouse Media
MEA Metalico HOV Hovnanian
NKTR Nektar Therapeutics JOYG Joy Global
NBIX Neurocrine Biosciences LBY Libbey
NXTM Nxstage Medical PSQ ProShares Short QQQQ ETF
PCAR Paccar PCU Southern Copper Corp
PDGI PharmaNet Development Group GLD StreetTracks Gold ETF (2)
RMBS Rambus TEVA Teva Pharmaceutical
RWT Redwood Trust TGIC Triad Guaranty
S Sprint Nextel Corp URE Ultra Real Estate ProShares ETF
SMP Standard Motor Products UCFC United Community Financial Corp
VASC Vascular Solutions
VIP Vimpel Communications
WPL W P Stewart & Co.
WMZ Williams Pipeline Partners LLP
So far, the longs are being led by Rambus, Canadian Solar, Beazer, and Bidz.com, all up over
25%. The best shorts have been financials Triad Guaranty, Ambac Financial, and Downey
Financial, all down more than 40%.
Sadly, the shorts have thus far been a better long portfolio than the long picks, and by a wide
margin. A portfolio with one share of each long is down nearly 11% since the contest deadline,
while a portfolio with one share of each short is up over 21%.
Data as of April 9, 2008.