Barron's Roundtable Stock Picks Final Addition
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Date updated:01-26-2008

Given last week's carnage, we thought it wise to check in again with the five investment pros whose picks and pans for the new year are featured in this final Roundtable installment. What, we wondered, do Felix Zulauf, Abby Joseph Cohen, Marc Faber, Archie MacAllaster and Scott Black make of the mighty downdraft in shares, and what might it portend?

symbol name last price % change open
  • +
  • XLY
    Consumer Dis Ss S
  • $28.69
  • -0.52%
  • $28.64

Zulauf: I recommend shorting the Consumer Discretionary SPDR, or XLY, an ETF [exchange-traded fund] reflective of consumer-discretionary goods and services. It trades for 31. The consumer is tapped out on home equity, which was a great force behind the spending boom of recent years.

People owning XLY also tend to own: AMDAMGCHSCSCODDDUKDWA

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  • +
  • GLD
    Spdr Gold Shares
  • $112.94
  • +0.57%
  • $111.74

Zulauf: I have recommended it several times over the years. Now it's $850 per ounce. The most important thing driving the price of gold is low real interest rates. Gold is also an anxiety indicator for the system, and this year may hold several more surprises. You can buy bullion through your broker or the GLD [streetTracks Gold Shares], and those who want to be more aggressive can buy the gold-mining ETF, GDX [Market Vectors Gold Miners].

People owning GLD also tend to own: ANVAYEAZOBBYBPZCOHCTRN

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  • +
  • WMI
    Wmi
  • $0.00
  • N/A
  • $N/A

Cohen: We also like Waste Management, which does exactly that. The stock is highly cyclical and often doesn't do well when the economy weakens.

People owning WMI also tend to own: ATIRIMMHMASYMCAWRSGGE

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  • +
  • ROH
    Roh
  • $0.00
  • N/A
  • $N/A

Cohen: My third name,Rohm & Haas, also has been hard-hit. This is a chemical company with some special characteristics. It is trading at about 13 times our estimate for 2008: $3.90 a share. [Goldman subsequently lowered its '08 estimate to $3.80.] Its high was in excess of 60 per share, and it currently trades around 50. Return on equity could move somewhat higher in the next couple of years.

People owning ROH also tend to own: BLSGLWHOTMRBKPNCQCOMSBUX

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  • +
  • XLNX
    Xilinx
  • $22.28
  • -1.46%
  • $22.42

Cohen: The stock is selling for about 20. Like Intel, Xilinx is trading at about a four-year low on a relative and absolute P/E basis. It is trading for about 14 times our '08 estimates of $1.22 a share, and operating margins are about 24%. [Goldman subsequently raised its '08 forecast for Xilinx to $1.28 a share.] The company has a reasonable amount of cash, which it may use for share repurchases.

People owning XLNX also tend to own: CRHIBMGOOGNUVOAAPLAKAMFDX

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  • +
  • EUM
    Proshares Shr Msc
  • $40.10
  • -0.02%
  • $40.24

Faber: I would short an emerging-market index via the ProShares Short MSCI Emerging Markets exchange-traded fund.

People owning EUM also tend to own: DDMDGPDIADOGDUGDXDDZZ

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  • +
  • FXI
    Ishares Tr Ftse I
  • $44.60
  • -0.16%
  • $44.30

Faber: You could also short the FXI, the iShares FTSE/Xinhua China 25, which mimics the 25 largest Chinese stocks listed in Hong Kong and China

People owning FXI also tend to own: ACIAINVANRAPCBBDBTUCHK

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  • +
  • FXP
    Proshares Ultrash
  • $7.82
  • +0.39%
  • $7.93

Faber: And, there's an ETF, the ProShares UltraShort FTSE/Xinhua China 25, which appreciates twice as much when the Chinese market goes down.

People owning FXP also tend to own: AAIARWDCRDXDSKFSRSTEO

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