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The Tell: How much money you could have made (or lost) with these bold market bets

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The Tell: How much money you could have made (or lost) with these bold market bets

No crystal ball could have seen 2016 coming.

From Brexit to Donald Trump to Leicester City winning the Premier League, shocks quickly became the norm as we careened from the highs to the lows of the year.

We’ve certainly come to expect the unexpected, but some were better at predicting the unexpected than others. Of course, for every call that struck gold, like the punter who placed a $25 bet on Leicester at 5,000-to-1 odds, several more missed the mark.

In MarketWatch’s “Need to Know” roundup, we’re always on the lookout for the more interesting Wall Street takes ahead of each trading day. Some of them pay off nicely, others not so much. (Sign up to receive the daily Need to Know email here.)

Here’s a sampling of the good and the bad over the past 12 months, and what they might mean for 2017.

Gundlach’s bear call

“The dam is breaking, you can feel it.” That was DoubleLine Capital’s Jeffrey Gundlach at the beginning of November. Specifically, he pointed to a bearish S&P SPX, -0.46% signal that predicted another 5% or 10% drop for the index. He’d been sounding the alarm for months ahead of that call, and while the declines may certainly come at some point, the market has clearly headed in the opposite direction since then, taking out new highs along the way.

Payoff/accuracy rating: 2/10

Trump will give stocks a big boost

At a time when investors were spooked by the prospects of a Trump triumph, James Juliano of the “Reading the World” blog took the contrarian route and went full bull ahead of the election. In fact, he called for a 30% surge within a year in the event of a Trump presidency. His call looked bleak on election night, but the stock market shook off the initial shock of Trump’s victory and has made a small dent in that 30%.

Juliano, who actually predicted a Trump win when so many were convinced otherwise, said he’s the only candidate with a “pro-growth economic policy agenda,” and pro-growth ideas. Looking ahead, Juliano’s predicting the S&P 500 to double in as soon as three years.

Payoff/accuracy rating: 8/10

Load up on oil before the OPEC deal

If you’d bought oil on any dips in the past couple months like Macquarie analyst Vikas Dwivedi advised, you’re probably looking at some nice profits. “We estimate the odds of a credible OPEC production deal at 60%,” he said back in October. “As a result, we recommend buying pullbacks ahead of the November 30th meeting in Vienna, especially when WTI prices are below $50 per barrel, as they are now.” OPEC did, indeed, hammer out an agreement and oil CLV7, -0.21% immediately went into big-time rally mode.

Payoff/accuracy rating: 8/10

Facebook will be hobbled by year-end

Back in September, Dana Lyons of J. Lyons Fund Management waved a warning flag on Facebook FB, -1.12% shares in the form of a “rising wedge” pattern. At the time, the stock was trading at around $130. “If this interpretation is correct, the apex is fast approaching,” he wrote. “The upper and lower bounds of the wedge will intersect before the end of the year… That means we should have resolution of this wedge by that time.” He was right: Facebook is just one of many high-tech darlings that has stumbled toward the end of the year.

Payoff/accuracy rating: 6/10

Gold set to sparkle

It had already been a painful year for Crispin Odey, with his hedge fund down almost 30% as of July 29. His attempt to remedy the situation was to push his gold GCG7, -0.53% exposure up to 86% of his entire assets under management. “For Odey’s sake — who is massively levered to an upside in gold paper futures — and that of his LPs, it would be a welcome change for gold to be repriced appropriately in the near future,” the Zero Hedge blogger wrote at the time. “Of course, that would necessitate the BIS to stop pummeling gold every other day when the precious metal is about to break out.” No such luck. Gold has been getting hammered in the home stretch.

Payoff/accuracy rating: 1/10

Caution ahead for small-caps

The small-cap universe of the Russell 2000 IWM, -0.38% was clearly outperforming the broader market when Jefferies Strategist Steven DeSanctis said in early August that the rally was due to come to an end. “Despite the bounce off the bottom for U.S. small-cap stocks, I remain very cautious on this asset class,” he said. “Absolute valuations are stretched, earnings growth continues to be weak, and volatility may increase due to the upcoming U.S. election, possible U.S. Fed policy moves and continued investor concerns around Brexit.” Of course, small-caps were just getting warmed up at the point and really caught fire after the election. If you sold on his advice, it probably cost you.

Payoff/accuracy rating: 3/10

Go long value, dump the ‘glamours’

J.P Morgan’s Khuram Chaudhry mid-July call to abandon pricey tech stocks like Amazon AMZN, -2.00% and Facebook in favor of value names like General Motors GM, -0.85% and Valero VLO, -0.45% may have been just a touch early, but at this point, it’s looking like a real winner. He pretty much nailed the eventual weakness that kept the “glamour” names from fully participating in the unexpected (to most) post-Trump rally. Who knows how long their underperformance will last as December buyers seem to be warming back up to the group.

Payoff/accuracy rating: 7/10

S&P is headed to 1,500

Veteran trader Joel Kruger made a springtime call that the S&P 500 was headed to 1,500 within months, if not weeks. The biggest reason for his bearishness was the shift to a more normalized Federal Reserve policy. “When you break it down over the past several months, we really haven’t gone anywhere,” he told MarketWatch. “It’s been a bit of a sideways chop, and the market is trying to figure out where the next big move is. I believe the next big move is to the downside.” The S&P ended the year at 2,238.83 and never even flirted with 1,500.

Payoff/accuracy rating: 2/10

Dow 20,000 by year-end

In early April, there was a bull market in doom-and-gloom, but Zor Capital’s Joe Fahmy took the complete opposite view to markets and called for the Dow to top 20,000 by the end of the year. “Of course, why would anyone have a positive outlook about the future when the media has pounded into our heads how miserable everything will be?” he wrote in a blog post. “Most people who don’t agree with this call will state the following headwinds: China, oil, slowing earnings, and election uncertainty.” Well, the blue chips DJIA, -0.29% put together a strong run to close the year… we came oh-so-close. But turns out there’s some truth to psychological hurdles, and in the final two trading days of the year, the Dow reversed course and ended just over 230 points away from 20,000.

Related: All of the important Dow milestones in one chart

Payoff/accuracy rating: 9/10

Apple to gain 40%

Back in April, Barron’s said Apple AAPL, -0.78% was poised for a 40% pop this year, pointing out that the stock was trading at 11.5 times earnings, vs. 23 for the broader S&P. Barron’s also cited a Credit Suisse report claiming investors don’t seem to fully appreciate Apple’s ability to ramp up profits from its services like music, apps, online storage, etc. Because of that, Barron’s slapped a $150 value on the shares. But here we are at the end of the year at $115, not far from where the call was made back in April.

Payoff/accuracy rating: 2/10

Buy these Buffett stocks

Bank of America BAC, +0.45% has almost doubled from its February levels. General Motors GM, -0.85% and IBM IBM, -0.37% have also outperformed the S&P rather nicely. If you’d have listened to Warren Buffett, via the Motley Fool’s Matthew Frankel, you would have made a nice profit. “One of the secrets to successful long-term investing is that you should love when stocks drop like this, as it creates an opportunity to set yourself up with great long-term investments at a discount,” Frankel wrote in early February in a note saying that those three Buffet stocks were on sale. “Any Buffett stock at an attractive price could be a smart addition to your portfolio, so keep an eye out for more bargains, especially if the market declines even more,” he said.

Payoff/accuracy rating: 9/10

Biotechs are for dreamers

The Fly got this one right back in the spring. “If your desire is to live in Fantasy Land, what better place to be other than the biotech sector, an industry without fundamentals and the albatross of having to meet earnings expectations,” the colorful blogger wrote. “This is the only sector that offers high returns, based on a drug dream similar to playing the lottery, that goes unrivaled in the market place.” Since that post, the iShares biotech ETF IBB, -0.65% has gone exactly nowhere. In fact, while the rest of the market has risen nicely, biotechs have lost about 5%.

Payoff/accuracy rating: 7/10

Silver takes aim at $20

Money Morning resource specialist Peter Krauth said in early June that silver SIH7, -1.59% was poised to topple $20 an ounce by the end of the year, which, at the time, represented a tasty 28% rally. He probably didn’t expect his target to be reached within a month but that’s exactly what happened. In fact, silver pushed past $21 an ounce. We’ll have to ding him just a bit considering silver is now right back where it was when he first made the call. Still, he said it would hit $20 by the end of the year, and it did just that, however fleetingly.

Payoff/accuracy rating: 9/10

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