So what if most stock predictions are off the mark? Finance magazines have to turn a buck, and what self-respecting monthly staff could resist the appeal of the year 2000's nice round numbers? All those lovely Os practically begged for number-stuffed forecasts.
Money and SmartMoney obliged, although Money one-upped its rival by tagging its fare with the headline "The Best Investments for 2000 and Beyond." It initiated two Net stocks into its rosy roster: Qualcomm and Broadcom. Qualcomm was an easy pick, and the stock's high profile this week - the stock lost air during the Nasdaq's 200-point drop - put a newsy spin on the monthly's coverage.
Qualcomm is in the sweet spot to cash in on the wireless boom, Money pointed out, but expectations for its stock are high. (This was written even before PaineWebber's from-left-field prediction that Qualcomm will hit $1,000 a share.) As for Broadcom, Money pegged its edge to be the legions of smarties who do R&D for the company. According to Money, 70 percent of the legions have fancy advanced degrees.
SmartMoney also trusted that eggheads would rule; it picked Citrix as the best bet for a blowout stock. Trading at $105 - up from $93 when SmartMoney filed the story - Citrix has plenty of upside, the mag is betting, and cool, bandwidth-clearing technology. SmartMoney also liked Veritas Software, whose storage technology has scored big with uber-Netcos Amazon.com and eBay.
SmartMoney subscribes to the keeping-up-with-the-Joneses philosophy of stock valuation, which says if other Net infrastructure stocks trade in the stratosphere, then it's only a matter of time before the market promotes Veritas to the same lofty status.
The Chicago Tribune's Bill Barnhart sifted through the debris of journalists' 1999 stock predictions. Of course, tallying up how often the mags are wrong is a cottage industry. But Barnhart's barbs hit their target. He suspected that an instinct for self-preservation was probably the main reason financial writers and editors underestimated the tech stock rally. "For the sake of diversification and something different from computer technology to write about, they guided investors into nontech sectors, such as health care, biotech and banks, which were swept aside by the tech bandwagon." He hinted, too, that journalists' exaggerated sense of their own importance prompted their widespread skepticism about a fifth year of well-above-average returns for the Standard & Poor's 500 index - "a cheap and easy investment that doesn't require reading advice magazines."
As a tip of the hat to Barnhart's own stock grok, we give him the last word:
"The question is why journalists bother to compete with market strategists and securities analysts who generally are paid a lot more." The man's got a point.