Ten Worst Performers of 2008

By Peter Brimelow, MarketWatch

Recently, I listed 2008's 10 best performers, as tracked by the Hulbert Financial Digest. ( See Dec. 17 column). I list 2008's 10 worst performers at the end of this column.

Worst really means worst in 2008. The bottom performer, Charlie Buck's Win Before You Buy, is down an appalling 82.0%, and there are several close contenders.

Simple arithmetic suggests these letters will never climb out of the performance hole they've fallen into. But, paradoxically, they could still be worth watching in the years to come.

I've remarked before on an oddity whereby letters often bounce back and forth between successive year's top and bottom ten. It happened again this year: The Linde Equity Report, No. 4 in 2007, is in the bottom 10 in 2008, down 63.6%.

Of course, it may not always be wise to bet on this rebound being sustained.

To paraphrase Caesar's "Gallic Wars," this year's Terrible 10 can be divided into three parts.

First are letters that have done appallingly this year -- and have also done appallingly over the longer term. In this category, I'd put Linde, Equities Special Situations (down 74.3%), and Buck's Win before You Buy.

Then there are letters that have done appallingly this year but have done well, even been top performers, in the past.

There's some reason to hope they might rebound.

In this category: BI Research, down negative 56.3% ( See Aug. 17, 2006, column); Louis Navellier's Emerging Growth, down 57.6% ( See Jan. 17 column); Medical Technology Stock Letter, down 61.2% ( See Aug. 20 column -- Ouch!); and Oberweis Report, down 63.4% ( See March 27, 2006, column).

Then there are the hard asset/gold bug letters, which have done appallingly in 2008 but brilliantly as recently as last year: Ruff Times, down 65.2%; the Dines Letter, down 72.1%; and the International Harry Schultz Letter, down 75.6%.

In varying degrees, these letters have a long-run worldview that they regard as delayed rather than discredited. But it's still an interesting question why they didn't trade.

One of this year's top performers, Investment Models' James Rohrbach, recently wrote in MarketWatch that "buy and hold is dead." See Rohrbach's commentary.

Maybe, although it sounds like the sort of thing people say at the bottom of bear markets.

It is certainly true that letters in my Category Two (appalling this year, but reason to hope if you look further back) tend to eschew market timing and remain fully invested, often in volatile stocks.

This was a bad year to be fully invested. But there can be dramatic rebounds in bear markets. If that happens, these letters could see a radical reversal of fortune.

It may not repair their Hulbert Financial Digest records. But if you are just getting involved with them now, who cares.

The Terrible Ten:

(Data is over the year to date through Nov. 31. Remember, the Dow Jones Wilshire 5000 is down 38.68% over that period.)

BI Research -56.3%

Louis Navellier's Emerging Growth -57.6%

Medical Technology Stock Letter -61.2%

Oberweis Report -63.4%

Linde Equity Report -63.6%

Ruff Times -65.2%

Dines Letter -72.1%

Equities Special Situations -74.3%

International Harry Schultz Letter -75.6%

Charlie Buck's Win Before You Buy -82.0%