Jeffrey deGraaf
Jeffrey deGraaf ISI
SECOND TEAM
Mary Ann Bartels Merrill Lynch
THIRD TEAM
John Mendelson Stanford
RUNNERS-UP
John Roque Natixis Bleichroeder ; Carter Braxton Worth Oppenheimer
On top for a fourth consecutive year, Jeffrey deGraaf of ISI Group “is a keen observer of markets and an independent thinker,” declares one fund manager. Bearish on the U.S. economy since December, the 40-year-old analyst nonetheless called a short-term rally in March, based on a contraction in credit-default-swap ratios and “a lopsided trading index reading that suggests disproportionate volume flows into advancing stocks.” The Standard & Poor’s 500 index, then at 1,308.77, would rise to 1,400 before starting to slide, he said. The index peaked at 1,426.63 in mid-May, at which point deGraaf recommended shorting financials and industrials stocks. Those sectors had underperformed the broad market by 5.1 and 3.0 percentage points as of mid-September, and the S&P 500 had slumped to 1,251.70. Mary Ann Bartels of Merrill Lynch, who vaults from runner-up to second place, “has the ability to screen out near-term noise and focus on the bigger picture,” one portfolio manager notes. Telling investors in January that “commodities are in a secular bull market, and corrections should be viewed in that light,” Bartels recommended overweighting energy stocks. The sector outperformed the broad market by 15.8 percentage points through mid-July, when falling oil prices dragged it down 12.3 percent off its 2008 high, but Bartels reiterated her view of the sector as a “long-term market leader.” By mid-September it was still ahead of the broad market by 0.8 percentage points. Although he slips one notch to third place, John Mendelson of Stanford Group Co. continues to impress investors with his ability “to capture significant moves in the market as a whole, a sector or a stock,” according to one client. Mendelson recommended selling Washington-based Fannie Mae in August 2007, at $66.87, citing concerns about the giant mortgage lender’s subprime exposure. Fannie Mae’s share price began to slip the very next day, and it had plummeted to $7.04 by early September 2008, when the federal government seized control.
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