10 Stocks for the Future

The end is nigh! The end of 2006, that is. Time for gurus from Wall Street to Mumbai to pick their 10 best stocks for 2007. Now it's time for my anti-end-of-the-year piece. Call it "10 stock picks for investors who don't care about the calendar."

The year-end stock-pick piece is a time-honored way to sell papers. Or, these days, to generate Internet clicks. But the project isn't totally self-interested. An investor who can get the trends right before the year starts and then pick the right stocks to ride stands to make a handsome profit in the 12 months ahead.

Of course, doing that isn't especially easy, which is why the reward for getting it right is so high. Not only do you have to call the trends correctly, you have to get the timing right. Warren Buffett, no investing slouch, bet heavily on a falling U.S. dollar in 2005. Right trend. Terrible timing. The result? A $955 million loss for his company Berkshire Hathaway(BRK.A Quote) that year.

The Great Weighing Machine

No wonder so many fundamental investors don't bother with trends and timing. In the short run, they say, the stock market is a popularity contest with investors voting -- on superficial grounds -- for the stock most likely to succeed. In the long run, they maintain, the stock market is a weighing machine that will accurately reflect the long-term pluses and minuses of every stock. Buy the best fundamental stocks you can find, don't worry about the market's temporary emotions, and wait for investors to eventually recognize those fundamentals in the stock's price.