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Insights and Thoughts from Dorfman Value Investments

John Dorfman writes a syndicated column that appears weekly in Forbes.com, GuruFocus.com, Ohio.com, the Omaha World Herald, the Pittsburgh Tribune Review and the Virginian Pilot. In it, he tries to provide original, profitable stock ideas for readers. In contrast to almost all other investment columnists, he systematically reports on past results, both good and bad.

Recent columns are archived here.

Ninety-One Year Old Man Wins My Stock Picking Competition

John Dorfman

May 3, 2021 — (Maple Hill Syndicate) – In a crazy-good year for stocks, Robert Zedler, a 91-year old retiree in Suffolk, Virginia, won Dorfman’s Three Stock Derby with a 334% return.

Despite his age, Zedler’s picks in my stock-selection contest were newish companies. His biggest gainer was Plug Power Inc. (PLUG), a maker of hydrogen fuel cells. That stock soared 543%. Next was Moderna Inc. (MRNA), the inventor of a leading anti-Covid vaccine, up 244%.

He also notched a 213% Corp in Livent Corp. (LTHM), a producer of lithium used in electric-car batteries.

It was an extraordinary year. Of 34 contestants, a dozen achieved a return of 100% or more. Four scored above 200%.

During the contest period – April 21, 2020 to April 21, 2021 – the Standard & Poor’s 500 Index returned 55%, including dividends. Twenty-two of the 34 contestants did better than that, and the average contestant’s return was 79%.

The jumbo returns came because the market was depressed a year ago by the Covid-19 pandemic and associated recession. The market bottomed in mid-March but was still depressed when the contest began.

The winner of Dorfman’s Three Stock Derby gets a $100 restaurant gift certificate, although Zedler chose to just take the money, saying he no longer dines out much.

Would you like to try your luck in the contest? The entry rules are simple, and are listed at the end of this column.

Zedler’s Outlook

Zedler, the winner, is retired from the agricultural chemicals business. Though he owned some aggressive stocks last year, Zedler is getting more cautious now. “I’m raising some cash,” he says. “I’m keeping my stable stuff, such as utilities.”

What worries him chiefly is the political environment. He thinks the country is moving toward a “socialist bent.”

Zedler likes defense stocks such as Lockheed Martin Corp. (LMT), and metals and minerals stocks such as Rio Tinto Group (RIO) and BHP Group (BHP).

Silver Medal

Second place went to Kimm Steven Nureck, who racked up a 298% return, good enough to win in most years. He runs Nureck Financial Services, an insurance agency in Laurel, Delaware.

Nureck owes his silver medal to a spectacular gain in Callon Petroleum Co. (CPE), which rose 751%. It was one of several energy stocks that investors thought were in danger of bankruptcy a year ago, but that have come back dramatically. He also had a 128% gain in WPX Energy, which was acquired, and a small gain in Yamana Gold Inc. (AUY).

Nureck credits President Trump with getting the economy running well, and thinks the good times will last until early next year, when he thinks inflation will slow down the economy and the market.

Bronze Medal

Taking third place with a 215% return was John A. Byrnes, a data engineer in Omaha, Nebraska.  His big winner was Penn National Gaming Inc. (PENN), up 582%. Byrnes picked it at a time when investors felt the outlook for casinos couldn’t be worse, due to the pandemic.

In the coming year, he thinks technology stocks will lead the market, as they have for most of the past five years. Among his holdings are Nvidia Corp. (NVDA) and Alphabet Inc. (GOOGL).

You Can Play

To enter Dorfman’s Three-Stock Derby, send your three stock picks, and your rationale for them, to me at jdorfman@dorfmanvalue.com.  If you prefer, you can mail them to John Dorfman, Dorfman Value Investments, 101 Federal Street, Suite 1900, Boston MA 02110.

All entries should include:

  1. Your name
  2. Address
  3. Occupation
  4. Email address
  5. Phone numbers for work and home.
  6. The three stocks you choose. Reasons are appreciated but not required.

If you finish in the top three, I will want to interview you on short notice and possibly on a weekend, so the phone numbers are vital.

You do not need to own any of the stocks you select, but it’s fine if you do. Stocks must be traded in the U.S., but not necessarily domiciled here.

Short sales are permitted but not encouraged, since I have a separate short-selling contest. Exchange traded funds (ETFs) are permitted.

Entries must be postmarked or time-stamped by midnight May 18. The next contest will run from May 18, 2021 through April 16, 2022. Your score is the average total return, including dividends, on your three stocks.

There is no fee to enter. The winner will receive a $100 gift certificate to the restaurant of her or his choice.

Disclosure: I own Alphabet personally and for most of my clients. I don’t own the other stocks mentioned today.

John Dorfman is chairman of Dorfman Value Investments LLC in Newton Upper Falls, Massachusetts, and a syndicated columnist. His firm or clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.

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