The 10 Worst Stocks for 2009

If last year taught us anything, it's that sometimes, the naysayers are absolutely, positively, 100% right.

When we ran our Worst Stocks for 2008 contest last year, little did we know the surprise the market had in store for investors. Now, we're all licking our wounds and looking for new opportunities -- but our worst-stock picks from last year, when the broader market lost 38%, could have helped you spot some real losers:

Stock

2008 Return

Amazon.com (Nasdaq: AMZN  )

(44.6%)

Beazer Homes

(78.7%)

Dell (Nasdaq: DELL  )

(58.2%)

First Solar (Nasdaq: FSLR  )

(48.4%)

Gap (NYSE: GPS  )

(35.8%)

General Motors (NYSE: GM  )

(86.9%)

Pfizer (NYSE: PFE  )

(16.9%)

UAL

(66.8%)

Washington Mutual

(99.9%)

Yahoo! (Nasdaq: YHOO  )

(47.5%)

Source: Morningstar, Yahoo! Finance.

Solar phenom First Solar ended up taking home the booby prize, but the Benefit of Hindsight prize has to go to Washington Mutual, which lost all but the last $0.02 of its value by the end of the year.

So with the benefit of a bear market to prove that avoiding losers can be at least as important as finding big winners, we're letting you take aim at another group of stocks for 2009. And as ridiculous as some of these picks might have seemed this time last year, we now know that just about anything is possible in the current economic crisis.

Will financial stocks again fail to find a bottom, and keep on plunging despite the federal bailout? Will the automakers fail to capitalize on the billions they also collected from the government? Will retailers turn the corner, and will home prices finally recover and give the homebuilders a break from the bad news?

You make the call
One of the most useful things about our Motley Fool CAPS service is that you can be just as successful picking losers are you would be singling out winners. It takes all kinds to make a market; if you think a stock will tank, selling it short can produce a nice profit.

We won't tell you what the worst stock of 2009 is going to be. We're leaving that decision to you, and to the 125,000 members of our CAPS community. It won't be an easy choice, since this year's competition includes plenty of ugly companies, but we know you're up to the challenge.

Peruse these bear pitches, then head over to CAPS to see what others think. You can cast your vote by calling "underperform" or "outperform" on as many of these stocks as you'd like. After everyone's had a chance to weigh in, we'll announce the results and reveal the company that our CAPS community believes could be the worst stock for 2009.

And the nominees are...

Come over to CAPS and cast your vote today!

Amazon.com, Best Buy, Gap, and Starbucks are Motley Fool Stock Advisor picks. Best Buy, Dell, Gap, Pfizer, Starbucks, and Sears Holdings are Motley Fool Inside Value recommendations. Pfizer is a current Motley Fool Income Investor recommendation, while Bank of America is a former one. The Fool owns shares of Starbucks, Pfizer, and Best Buy. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Dan Caplinger deserved to win the Worst Tuxedo Ever Worn award at his girlfriend's senior prom, but some dude with a body-painted tux stole that away from him. He owns shares of Starbucks. We still haven't figured out a good award for the Fool's disclosure policy.


Read/Post Comments (14) | Recommend This Article (70)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 28, 2009, at 4:52 PM, FinancialFellow wrote:

    Good picture choice. A man in a gasmask is definitely in order. My vote is with Citibank. Who'd have thought they would have gone down to $3 a share. Sirus/XM is a pretty major one, too, however, satelite radio is still an infant industry - when compared with banking.

    On the flipside, one company that I think may wind up being a winner in the future is Lifelock. They aren't publicly traded right now (backed by venture capital). That said, I suspect once they go public they could do very well. Presently they are advertising like mad. Given the continual increase in ID theft, along with the media attention that ID theft is getting, I suspect their business will continue to grow. They charge $9 a month for ID theft protection and throw in additional services to make it worth customer's expense: http://financialfellow.com/2009/01/22/is-lifelock-worth-the-...

  • Report this Comment On January 28, 2009, at 6:00 PM, Nanscott wrote:

    I see that Best Buy and BlockBuster are both listed in the worst 10. Perhaps with Circuit city tanked, and Best Buy a beneficiary of that action, those two will merge, (remember Blockbuster and Circuit City merger talks last April?). How will they then be rated? Might even be a good marraige.

  • Report this Comment On January 28, 2009, at 8:05 PM, jackietomlin wrote:

    Hi,

    How is it that Pfizer is on the Value Stock buy list and at the same time listed as one of the worst stocks of 2009? Are you guys thinkins?

  • Report this Comment On January 28, 2009, at 8:06 PM, jackietomlin wrote:

    How is it that Pfizer is on the Value invester buy list and also one of the worst of 2009???

  • Report this Comment On January 28, 2009, at 8:59 PM, Talisman28 wrote:

    Hmm. I've held Best Buy (thanks to MFSA) for quite a while. Did I miss a "hold" or "sell" notice?? It's nice to see the airing of diverse views and honest disagreements, but when a stock pick from MFSA suddenly appears on the list of "ten worst for 2009" nominees, I've got to wonder. It would have been interesting to at least see a commentary from the folks who made the original recommendation 5+ years ago.

  • Report this Comment On January 29, 2009, at 12:06 AM, TMFDiogenes wrote:

    Hey Jackie,

    Great question. Talisman hit the nail on the head -- it's important to understand the bear case as well as the bull case for the stocks we own. If one of our writers disagrees with an official recommendation, then we certainly want them to write about it so people can weigh all of the evidence before deciding whether a particular stock is right for them.

    Ilan

  • Report this Comment On January 29, 2009, at 12:37 AM, westcoastsparty wrote:

    I hope this is not the level of research that you are providing. I will disagree with at least three of your "worst of 2009" picks. BAC, Best Buy and Blockbuster. In down times home entertainment is all people can afford. BAC is up 25 % in the last 3 days. Come on fools. How can you list one in the safe picks and have it in the worst of?

    2009 is time to shine not misdirect the beginning investor

  • Report this Comment On January 29, 2009, at 7:48 AM, popopapa wrote:

    Best Buy? Spin the bottle is a kids party game!

  • Report this Comment On January 29, 2009, at 11:26 AM, RMILAN1 wrote:

    As a member of Hidden Gems I have come to the conclusion your picks may as well come from a drunk throwing darts at a listings

    Did any Fool experts advise clients to get out of the market in Sept?

    All I get from Fool is chances to spend more money on useless subscriptions. It would be better to sell one subscription and combine all the info and advice in one letter.

  • Report this Comment On January 29, 2009, at 12:13 PM, jrj90620 wrote:

    I pick Sears Holdings.Could see bankruptcy here.

  • Report this Comment On January 29, 2009, at 1:30 PM, FoolMDimasi wrote:

    My pick - Charming Shoppes will go away this year.

  • Report this Comment On January 30, 2009, at 12:58 PM, jackmccracken wrote:

    You guys are amazing. I bought Best Buy based on comments from MF, all which still hold true. With increased market share as competitors fall by the wayside, and increased demand for consumer electronics and home entertainment to replace more costly diversions like travel, BBY is well positioned. Now you nominate it as potentially the worst stock of 2009?

    Are you just trying to tick off your subscribers?

  • Report this Comment On January 31, 2009, at 5:03 AM, dividendgrowth wrote:

    TMFRick picked SBUX as his choice for worst 2009 stock, so I couldn't help but to long SBUX from here.

    I have really made some great money just by betting against this guy.

  • Report this Comment On April 09, 2009, at 2:01 PM, Deepfryer wrote:

    I wish I had bought all these companies. Sears, Best Buy, Sirius, Ford, Panera Bread, and Starbucks are all crushing the market. That's 6 out of the 10 picks... Ford and Sirius are up more than 100% already, after just 3 months!

    I think many of these stocks will actually be remembered as some of the best stocks of the year. I'm not trying to bash TMF... but you have to take these predictions with a grain of salt.

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