David Robinson: Local advisers didn't see the 2017 rally coming - The Buffalo News

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David Robinson: Local advisers didn't see the 2017 rally coming

Heading into 2017, our panel of investment advisers wasn't expecting much out of the stock market this year.

Boy, were they wrong.

A steady-as-she-goes economy with nary a whiff of inflation, coupled with a massive tax cut targeted mainly at business, sent stock prices soaring this year, with both the Dow Jones Industrial Average and the Nasdaq composite index surging by more than 25 percent through mid-week.

"If you could dream up a whole bunch of things that could drive a bull market, we have them," said Jeremy Briggs Beck, the president of Anvil Investment Partners in Buffalo, whose forecast for double-digit gains in 2017 made him the second-most optimistic member of the investment panel.

But Beck and the other advisers weren't optimistic enough. Their average forecast that the Dow would gain 6 percent and the Nasdaq would rise by 7 percent were way off. The Dow's gain was four bigger. The Nasdaq's rally was three times stronger.

What went wrong? They thought most of the so-called "Trump bump" already was factored into share prices. They saw that the market's rally was getting old, by historical standards. And they thought rising interest rates and high stock valuations would put a damper on the market's upside.

Not one of the 10 investment advisers foresaw the strength of the market's rally last year. Most didn't even come close.

The one who did the best - Arbor Capital Management Managing Partner Gerald T. Cole - wasn't too far off. He predicted a 15 percent rise in the Dow and a 20 percent jump in the Nasdaq, but even Cole's prediction still fell about 2,000 points short of the Dow's actual rally.

It was a similar story with the advisers' portfolios of individual stock picks. They were solid, gaining an average of almost 16 percent, but only one  adviser - Anthony J. Ogorek of Ogorek Wealth Management in Amherst - managed to beat the market, with a whopping 62 percent average gain by his stock picks.

Ogorek's portfolio was supercharged by his pic of OLED display maker Universal Display, whose stock tripled as it added new supply contracts. His other picks didn't do badly, either, with spirits producer Diagio rising more than 38 percent and to other picks, drug maker Johnson & Johnson and East Aurora aerospace firm Astronics, both gaining more than 20 percent. Ogorek's laggard pick was biotech firm Biogen, but even that gained 13  percent.

None of the other portfolios managed to beat the market.

 

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