Citi’s quant staff is casting a jaundiced eye on contrarian trades for the 12 months forward.
“We’ve got learnt to be suspicious of attention-grabbing contrarian methods,” strategist Robert Buckland wrote in a word. “They may make for good stockbroking, however they do not ship good long-term funding observe information.”
Contrarian calls underperformed in 2022, Buckland stated.
“Bearish calls on IT labored, however their contribution was worn out by bullish calls on China and Power shares,” he famous.
In shares, contrarians “are at present lengthy Development, bearish Worth and like cyclical to defensive sectors. They’ll possible be bullish on US equities (SPY) (QQQ) (IWM), particularly Tech shares (XLK) (XLC), and bearish Power (XLE). Inside EM, they’ll possible purchase something China-related (MCHI).”
The bull contrarian inventory picks for 2023:
- Meta (NASDAQ:META), 12 months up to now efficiency -65%
- PayPal (PYPL), -65%
- Tesla (TSLA), -62%
- AMD (AMD), -57%
- Netflix (NFLX), -51%
- Salesforce (CRM), -50%
- Intel (INTC), -50%
- Amazon (AMZN), -49%
- Micron (MU) -46%
- Edwards Lifesciences (EW), -43%
The bearish contrarian inventory picks for 2023:
- Occidental Petroleum (NYSE:OXY), +99%
- Marathon Petroleum (MPC), +65%
- Exxon Mobil (XOM), +64%
- SLB (SLB), +54%
- ConocoPhillips (COP), +53%
- Valero (VLO), +52%
- McKesson (MCK), +48%
- Chevron (CVX), +41%
- Daiichi Sankyo (OTCPK:DSKYF), +35%
- Glencore (OTCPK:GLCNF), +29%
See 2022 in 22 numbers.