In hindsight, there couldn't have been a worse time to pick losing stocks.
This time last year, we were deep in the grip of the Great Recession, and the S&P 500 had fallen a spectacular 32% over the previous four months. Yet we had the nerve (or at least the editorial deadline) to call out 10 companies as the worst places to invest for the coming year.
And man, did they soar.
Big gains for lousy stocks
Of the 10 stocks we picked, only two -- Citigroup (NYSE:C) and Blockbuster (NYSE:BBI) -- actually lost money in 2009. Meanwhile, two of the picks -- Ford (NYSE:F) and Sirius XM Radio (NASDAQ:SIRI) -- more than quintupled in price. Several other picks, including Bank of America (NYSE:BAC), Sears Holdings (NASDAQ:SHLD), and Starbucks (NASDAQ:SBUX), more than doubled. Overall, a portfolio equally divided among those 10 stocks would have risen an astounding 146% in 2009. Not exactly what we expected to see -- especially after making much better picks for 2007 and 2008.
Of course, at the time, things looked terrible for the markets. But today, we're in just as crazy a position as we were last year. The market is up more than 70% from last year's lows, but unemployment still sits near 10%. Retail holiday sales were nothing to cheer about, despite many economists saying the recession is over. And earnings season has not gotten off to a whiz-bang start.
Moreover, despite some amazing returns over the past year, many of last year's worst-stock picks are still in some pretty bad circumstances. Ford has $13 billion in Voluntary Employee Benefit Association obligations that it has to pay over the next decade or longer, plus billions more in long-term debt -- it will take more than an award or two to take care of that. Bank of America still has a bunch of garbage on its balance sheet. As for Sirius ... well, it's still competing against free radio, and with the stock still trading at less than a buck, I just can't treat it as a serious (you'll pardon the pun) place for my money.
The good, the bad, and the ugly
Amidst all this confusion, you still need to know which stocks deserve your money and which you should avoid. Well, we already covered that first part by calling out what we think will be the best stocks for 2010 (and you decided that the winner was a bit fruity). Now, we're here to give you our opinion on that second part. And, again, we're counting on you to choose which "wins."
So take a look at the list below, check out the arguments put forth by our writers and analysts, and vote in each article's poll on whether you think each of these will be the worst stock of 2010. Remember, we're a motley bunch of writers with motley opinions. But your votes will ultimately decide on the biggest loser. Check back here in a few days, after we tally up the results, to see what everyone considers to be the winner -- er, loser -- for this year.
