As the idea for this post came from Philip O'Sullivan, it seems apt to quote the first paragraph of his post at the start of mine by way of explanation:
In a recent email exchange with some of the leading share bloggers in the UK and Ireland I proposed that we each sit down and draft our thoughts for how the markets will behave in 2012, and what stocks we'd like to own to play some of those themes. Given resource limitations (I don't know of any blogger who has a team of analysts working for them!), there will, I'm sure, be quite a bit of selection bias in the names we highlight – generally speaking, people invest in what they know! I illustrate that perfectly by choosing 5 Irish listed names in my core picks, although all of them are firms with a distinct international dimension (none of them could be described as plays on the Irish domestic economy). But despite the selection bias I do think that this is a worthwhile exercise, and one that will no doubt contribute to idea generation. As ever, readers are strongly advised to do their own research and consult a professional financial adviser if they want to invest their own money.
The concept, then, was to pick twelve stocks we thought would outperform in 2012. Staying true to form, I'm being a little more boring that Philip and choosing to stick precisely with what I know - my portfolio, more or less. My reasoning is that my portfolio is run by looking at the stock market and picking stocks I think are likely to make me money; if I don't think that, the stock should get dumped. If I were to pick twelve stocks different from my portfolio, the logical thing to do would be to sell my portfolio and buy the twelve stocks - more or less! Unless, of course, I think that I can pick stocks that will go up in 2012 but not necessarily the longer term. That sort of prediction is something I won't even try and dabble in, so I'll keep my faith in value. Maybe it'll outperform this year, maybe it won't - there are no certainties. Investing, for me, is just about trying to tip the odds in my favour in the long-term.
What…
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