When former world chess champion Garry Kasparov lost to
IBM 's Deep Blue chess computer more than a
decade ago, we at The Motley Fool had our own
particular insightinto what had just happened.
Better yet, the insight -- translated into action -- has
led us to pick numerous winning stocks in the years since.
Below, I'm going to share with you five stocks our
supercomputer predicts will beat the market going forward,
and two that will not.
But first, let's go back to May 11, 1997
In a historic six-game match, Deep Blue and
Kasparov were tied after five games. But in the closing Game
6, in springtime in New York City, the computer absolutely
crushed the chess expert -- in less than an hour, it ran
Kasparov off the board in just 19 moves. Kasparov had
officially lost the storied showdown. Extremely ill-tempered
afterward, he accused the IBM team of cheating. To his
credit, he also asked for a rematch ... which has never
happened to this day.
But back to the investment insight. The headlines after
the match all basically read like so: "Machine Beats Man." To
which we at The Motley Fool said:
Yeah, right.
Because it wasn't really "the machine" that beat the man.
It was dozens of IBM programmers and world-class chess
experts all working
togetherwho
programmedthe machine that beat the man. Key
difference. It was a whole bunch of humans all ganging up on
Kasparov -- and even worse for him, they were harnessing the
power of a supercomputer! Game over, baby. Looked at this
way, you can see how it was really an unfair fight.
A few years later, in July 2001, I wrote an eight-page
Word document that laid out how The Motley Fool could create
an identical solution for investors. Start with the Fool
community and its millions of visitors. From that, I
hypothesized we could locate tens of thousands of superior
investors. We would then build our own supercomputer, a
database very similar to Deep Blue, except that ours would be
filled with
stock picks, not chess moves. By combining our human
intelligence with our computer's great big brain, I believed
we could program it to beat The Man.
Who's the man?
Who's Garry Kasparov in this metaphor? Take
your pick: Either it's the S&P 500 market average, or a
Wall Street analyst, or both. We believed that The Motley
Fool community, working together with the help of a massive
community intelligence database constantly refreshing itself
with new data like a Doppler radar, would enable us to
outperform Wall Street.
In October 2004, we began building it. We alpha-tested it
privately for two years. We then launched it to a free public
beta test in October 2006.
The stocks our supercomputer loves today
So what does the world's greatest investment
community favor
going forward? You'd probably like to know which
moves Deep Blue is planning to unleash against Kasparov in
their
nextgame, if it ever happens. I can't tell you that.
But I
cantell you five stocks that Motley Fool CAPS
believes will beat The Man over the next one to three years,
with a line or two about why.
Here you are, in order of popularity on our system
(measured by the number of stock picks made -- the database
is now more than 3.4 million picks and growing):
Activision Blizzard (Nasdaq: ATVI) --
Leading video game publisher of hits like
Guitar Hero,
Call of Duty, and
Warcraft.
Petrobras (NYSE: PBR) -- Brazilian oil
exploration and production giant.
Aluminum Corp. of China (NYSE: ACH) --
Aluminum giant should benefit from Chinese stimulus package
and increasing demand for the metal.
Corning (NYSE: GLW) -- International
exposure as hedge against U.S. slowdown.
National Oilwell Varco (NYSE: NOV) --
Oilfield services giant generates substantial free cash
flow.
Do your own research on these stocks, and decide whether
you agree with "Deep Fool." And while you're deciding, here's
my other promised freebie -- two popular stocks you may have
looked at before, which our community does
notbelieve will beat the market going forward:
Overstock.com (Nasdaq: OSTK) --
Near-chronic inability to generate earnings or free cash
flow.
Delta Air Lines (NYSE: DAL) -- Competes in
a highly competitive industry with expensive capital
requirements and vulnerability to oil prices.
On whom would you bet your money today? Kasparov, or Deep
Blue?
From whom would you take your stock market advice today? A
Wall Street broker, or The Motley Fool community?
But wait!
Before you answer, how promising might it be
if I told you that at Fool HQ, we have experts like Garry
Kasparov walking around
usingour own Deep Blue (CAPS) to pick stocks? Continued... |