Spooky Stocks 2008

It's time to celebrate Halloween by revealing this year's Spooky Stocks - i.e. the stocks most likely to scare investors and blow away their returns. Before we do so, let's first take a look at the performance of previous spooky stocks.

The stocks I selected back in 2006 declined -16.85% last year which was pretty good considering the bull market at the time. In addition, if you kept shorts on many of those stocks again for another year, you'd would have seen some seriously scary action - namely JDO, SORC, & OVRL (spooky stocks in 2006) went on to decline more than -95% if you sold them short for two years instead of just one!

Last year we started doing two lists - spooky stocks submitted by members and my own picks. Here's how they both performed. Members' spooky stocks declined -51.39% (2 gainers & 28 losers). My spooky stocks declined -44.43% (3 gainers & 24 losers.

Unfortunately, both tracking performance figures are not fully representative of the declines. For example, within the members' picks (BEAS, HSOA, & CFC) were not figured in because they either got taken over, moved to the OTCBB, or something else. The same is true with 6 of my picks last year (ACA, CLAY, FMP, NRMX, RSTO, & WCI). I know a couple of these went belly up, but as for the others I don't really know. If someone would like to take the initiative to track down the final closing price of each of these stocks, please let me know and I'll update these performance totals.

With that known, it's time to reveal our Spooky Stocks for 2008:

Although I don't know what the reasoning was behind the picks submitted by members this year, I can tell you that my goal was to find the companies with the worst fundamentals, valuations, and most negative forward potential. Things could certainly change and some companies as you know do come back from the dead, but many of these stocks are headed to the market's graveyard as we've seen in previous years. In fact, current economic conditions should accelerate that trip.

Happy Halloween!