One of the reasons I like writing on the Web is that, while it sometimes comes back to embarrass me, there's a high level of accountability: Every column I've ever written is still posted online. In that spirit, at the close of each year I like to review the best and worst advice given in my columns for the previous year.

While I will review my stock picks and pans, keep in mind that I strongly discourage anyone from buying or selling based on what I -- or anyone else -- recommends. My goal is to help you think sensibly about investing and develop the tools to make good decisions on your own (keeping in mind that the best decision for many people is to avoid picking individual stocks altogether; there's no shame in mutual funds -- or better yet, given the many scandals in the mutual fund industry, index funds).

Last year, I wrote favorably about particular stocks on 24 occasions (in a few cases, I recommended that same stock at two different times during the year) and wrote unfavorably about (or announced that I was selling) stocks on 10 occasions. On average, my picks were up 37%, and my pans/sales rose 20% -- a decent performance, especially since the three pans that rose the most were simply stocks that I had owned and sold too early (the other seven declined by 6% on average). I've posted the entire list, with performance information, on the Fool News and Commentary discussion board.

Comments on picks
I suggested nearly half of my 24 picks during the year in my first column 2002 Report Card, 2003 Opportunities. In it, I said, "While I find little reason to be enthusiastic about stocks in general, there are always pockets of opportunity." I named 11 stocks, mostly in the quick-serve restaurant and retail sectors, which have risen by an average of 50%.

These two sectors fell more out of favor in the early part of the year, as investors became increasingly nervous about the Iraq war and consumer spending, which made me even more bullish so I recommended seven stocks in two Februarycolumns, which have risen by 43% on average.

I recommended McDonald's in my first column this year and again in October, when I named Jim Cantalupo CEO of the Year. While the stock is no longer a 50-cent dollar, I haven't changed my opinion that I expressed in my more recent column: I think a "robust turnaround is under way, and the company and stock will provide at least another year or two of pleasant surprises -- which is why I have yet to sell any of my shares even after they've nearly doubled off their lows."

I wrote five columns about JetBlue, a superbly managed company that I admire a great deal. There's a big difference, however, between liking a company and its stock -- as I've written manytimesbefore, valuation matters! In my first column on JetBlue in June, I said that I wasn't considering buying the stock at its price then ($26.47, split adjusted), but paid it a great compliment, saying, "If I were forced to buy one stock trading in excess of 35 times this year's estimates, it would be JetBlue."

For a while, I felt sort of foolish not pounding the table to buy the stock, as it nearly doubled to a high of $47.14, but I wasn't even tempted to chase it. In fact, by the time I wrote my final column on JetBlue in September, when the stock had nearly hit $40, I was pounding the table to avoid the stock at all costs, concluding: "As with any richly valued stock that is widely beloved by investors, I suggest searching for stocks at the other end of the investment spectrum."

Sure enough, JetBlue stumbled -- not a lot, but there was no room for error in the stock price so it's been nearly cut in half. Now trading at approximately 25 times next year's estimates, it's still not cheap enough to recommend.

Comments on pans
I made three emphatic pans this year: In January, I reiterated my bearishness on Farmer Mac (NYSE:AGM), which had risen substantially since I warned investors about it in twocolumns last year; in June, I said to avoid bonds; and in June and again in October, I expressed bearishness on tech stocks. Let's look at each of these.

Farmer Mac
Farmer Mac has fallen this year, but I believe it remains substantially overvalued, which is why I have been short the stock for nearly two years. This stock puzzles me. For example, it rose 10% after the General Accounting Office released a damning report in October that in my opinion emphatically confirmed nearly every element of my short thesis. I can only conclude that few investors bothered to read the lengthy report and instead skimmed Farmer Mac's press release, which presented a highly misleading picture of what the GAO really said. I think insiders understood the report: Take a look at the massive, high-level insider selling -- page after page of Form 4's. While I can't predict what Farmer Mac's stock price will do in the short term, I remain confident of the end game.

In June, I wrote that "Investors are scrambling for yield, with little regard for risk, due to extremely low interest rates -- 10-year Treasury notes closed Wednesday at 3.29%, their lowest yield in 45 years." Thank goodness I refinanced my mortgage at that time, as the 10-year Treasury has risen significantly to close yesterday at 4.25%.

Tech stocks
As is often the case, I was early when in June I lamented the return of "rampant speculation" in the markets, especially in the tech sector, where I called valuations "ridiculous." Since then, the Nasdaq 100 tracking stock (AMEX:QQQ), a good proxy for richly valued tech stocks, is up 18%. In light of the positive economic data and earnings reports, am I willing to admit I was wrong? Heck no! As I argued in an October column, I am more certain than ever that tech stocks are due for a sharp correction.

Advice going forward
After more than 150 columns for The Motley Fool over the past four years or so, I can't think of any new advice, so allow me to summarize the timeless, basic principles of sound investing (with links to my columns on each of these topics):

  • Before you start picking stocks, make sure you have the three Ts: time, training, and temperament.
  • Never pay up for a stock, no matter how much you like the company. Only buy when you're Trembling With Greed.
  • Finally, don't get too caught up with investing. Be sure to have A Little Perspective and count your blessings. We all have much to be thankful for.

Whitney Tilson is a longtime guest columnist for The Motley Fool. He owned shares of Home Depot and McDonald's and was short Farmer Mac at press time, though positions may change at any time. Under no circumstances does this information represent a recommendation to buy, sell, or hold any security. Mr. Tilson appreciates your feedback at To read his previous columns for The Motley Fool and other writings, visit The Motley Fool is investors writing for investors.