Top Stock Picks and the Spirit of Competition

Subscribers to Chart of the Week received this commentary on Sunday, January 21.

There’s a lot in life they don’t tell you about growing up. One I’ve realized lately is that in the real world, there are so few chances to compete, and win, at something. There are wins to be had in life, of course, but I’m talking about how adulthood features very few competitions that declare a clearcut winner. Think of all the teams or competitions you participated in as a kid, and how good a ‘win felt. Highest grade in the class? You came home and proudly put it on the fridge. Most books read in the summer of 2000? I wish I could still put that on my resume. Your Little League team wins regionals? That was a pizza party you’ll never forget.

Even if you didn’t win, the competitive spirit of those silly little contests made life fun. All of this is to say that at Schaeffer’s, we’re proud to announce that Senior Market Strategist Matthew Timpane won MoneyShow’s Top Pros’ Top Picks project for 2023, with his MongoDB (MDB) recommendation gaining roughly 115% on the year. The cloud-based software stock out legged second place’s pick Shopify (SHOP), which finished with a year-to-date gain of 97%, and the third-place pick Rocket Companies (RKT) that finished up 87%. Below, we’ll unpack the pick and glean some nuggets that can shore up your investing thesis in 2024.

The beauty of competitions like these is that there are lessons to be had regardless of winning or not. And the picks project was not meant to determine who the best trader is, or who managed their stocks the best. These are set-it-and-forget-it ideas, and as MoneyShow editor-in-chief Mike Larson put it, they “give you insightful and actionable investment ideas which you can put to work as you see fit.” But at the same time, wins anywhere should be celebrated, and more importantly (because we are, in fact, adults now, unfortunately), analyzed posthumously to identify investing lessons for the future.

In the writeup sent to MoneyShow in December 2022, Matt highlighted MDB’s short squeeze and upgrade potential. Steadily throughout 2023, the stock received a steady flow of price-target hikes, fueled by post-earnings bull gaps in June and September, a driver also identified after MongoDB’s sunny revenue forecasts in late 2022, derived from key partnerships in the cloud infrastructure sector. The pick is a testament to Schaeffer’s Expectational Analysis: identifying stocks with a solid technical foundation yet lagging sentiment. The icing on the cake was Matt pinpointing cloud databases as a lucrative sector to target heading into 2023.

MoneyShow’s Top 2024 Picks Report

Matt will have a shot at defending his crown this year with his Unity Software (U) and Taiwan Semiconductor (TSM) selections, (note how tech and semiconductors once more rule the roost) of which their writeups can be found in our Schaeffer’s Top Picks of 2024 report below. It’s early in the year and U has suffered a false start, but TSM is already up 8.7%.

Schaeffer’s Top 2024 Picks Report

MoneyShow’s picks report for 2024 reveals some trends to potentially follow this year. Tech stocks were once more the most popular of choices, with analysts seemingly betting on the sector running back the massive gains wrought from 2023 in 2024. Healthcare stocks, which struggled for most of 2023, received a lot of play in the 2024 report, while crypto stock’s late burst in 2023 garnered some interest for next year as well. Real estate investment trusts (REITs) and precious metal stocks were also popular among analysts and should be monitored in concert with interest rates and the U.S dollar.

There are other wins to celebrate at Schaeffer’s. In our two most popular trading programs, we delivered an average winner of +122% in Elite Trader and an average winner of +104% in Lightning Trader. And to stack the spirit of competition into 2024, Senior V.P. of Research Todd Salamone and Senior Market Analyst Chris Prybal both entered in the Cincinnati Business Courier’s stock picking contest. Their picks can be found in the Cincinnati Business Courier later this week.

That competing feeling fades and becomes so much harder to replicate as we grow up. Unless you’re a professional athlete or award-winning artist, there’s not a lot of victories to be had in the real world. Instead, we become siloed off in our own individual lives, manufacturing wins in an abstract manner. Of course It’s important to ‘win the day,’ and a happy, healthy life is a win in and of itself. But in the monotony of adulthood, it’s difficult to maintain the child-like excitement that competitive juices bring out. Life is not binary and should not be viewed from an absolutist lens of strictly wins and losses. Instead, with the excitement of a new year and new goals still fresh in mind, you’re now armed with a little more knowledge for your 2024 investing thesis, as well as a renewed appreciation for what makes life fun--little victories.