The Rally: Our 2011 Portfolio

Wednesday, January 05, 2011 /by

Rn After a few fits and starts, the Rally returns for 2011. In case you've somehow forgotten, every other Wednesday and Thursday, freelance tennis writer Kamakshi Tandon and I will discuss a topic from the world of tennis. To start the new year, we're turning the tour into a stock market. Here are our first two exchanges; we'll do two more tomorrow.

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Kamakshi,

We’re talking stocks to start 2011, as in which players’ should we buy, which should we sell, and which should we hold onto. I have to start by saying that I’m highly underqualified for this exercise. I’m still not even sure what the Dow Jones number we hear so much about actually is—11,393 what? I know you used to work for the company, so maybe you can clue me in.

I also wouldn't make a great long-term investment adviser. I once stated that Nicolas Almagro was the young Spaniard to watch, not Rafael Nadal. But hey, their careers aren't over yet, right? Almagro could still win 10 Slams and prove me right. I also had a friend who, when he first saw Roger Federer, said that he was going to break Sampras's Slam record. I spent many years laughing at him; I haven't been laughing for a while.

Whenever i think of making predictions, I stop to wonder why: Why do we do it? We know we can't foresee the future. The Times did a long series on the subject recently, and came up with various reasons. One is that they "express our hopes"; another is that to be interesting at all, a prediction has to be risky enough that it's almost always wrong—if you play it safe, you might as well not make bother making it. For me, hearing someone's prediction just provides an interesting second of "what if?" When I hear Brad Gilbert make one of his outrageous statements, like Nadal will win 20 Slams, it provides a little moment when you think, "Wow, what if that really did happen?" And then you forget all about it. The downside is that a prediction often ends up being the only thing readers will focus on. But what can you do, we're all shallow. The ultimate reason that we like them, I think, is that we like the person making the prediction to be wrong, so we know they're human and stupid just like us.

So with that, here we go. Here are a few players whose performances I'm interested in for 2011.

Rafael Nadal
He’s not exactly value stock. On the one hand, I don’t see him repeating his three-Slam season. As great as he is, he historically plays more close matches and has more high-wire escapes than Roger Federer did in his back-to-back three-major seasons in 2006 and 2007. But at the same time, he may only be entering the same type of prime, mid-20s period that Federer enjoyed then. Judging from the comments he has made about the Australian Open, I get the sense he is a little more willing to be forthrightly and publicly confident than he once was. In other words, he’s not saying that winning the thing will be borderline "impossible." I’m going to take this as a positive sign and give Nadal a hold.

Kim Clijsters
If there was ever a time for Clijsters to grab the brass ring at last, you would think it would be now. Serena won’t play an important tournament until Key Biscayne, at the earliest. Caroline Wozniacki is going to feel the burden of that No. 1 spot, and she’s isn’t as physically gifted as Clijsters. Kim has been to the finals in Melbourne and Roland Garros, and she seemed to exorcise a third-set demon against Venus Williams at the U.S. Open. All of which means that Clijsters, who has a history of losing just when you think she should win, will probably be a disappointment. I’ll advise selling.

Gael Monfils
Wow, this is always trouble. I’ve been burned multiple times before; in fact, I’ve sworn the guy off on multiple occasions. But I’m going to ask it again: Is he ready to break the French curse and do something, anything significant? A Slam title, a Slam final, even just a Masters title? If it was anyone else, I’d say the signs are good: By the end of 2010, Monfils seemed calmer, more focused, more serious and determined than he ever has. He beat Federer to make a Masters final and played a very sane match against an admittedly terrible Tipsarevic in the Davis Cup final. I’ll go back out on the limb and make a buy recommendation.

Maria Sharapova
Now, on name-brand alone, this is good value: Sharapova, a three-time Slam and former No. 1, is currently ranked No. 17 (eliminating No. 9 Elena Dementieva). She’s engaged, she’s already stinking rich, and she’s put a lot of miles and more than a few injuries on her body. But you still have to think she’s a better player than half the women currently ranked ahead of her. Whatever her life situation and its relative comfort, she’s a self-motivator, and she has a hard-nosed new coach. It’s hard to imagine her being ranked lower than this, isn’t it? Buy.

Jurgen Melzer
Is he a late-stage flash in the pan? Or has he finally reached the level that he should have reached long ago? The game, especially with his superb backhand drop-drive combination, has always been there, but the head refused to believe. In 2010, whether he was beating Nadal in China or gutting out a five-set win over Berankis at the U.S. Open, it seemed that Melzer was no longer waiting for disaster to strike, which is how he used to appear to me. He finished last season at No. 11, so it’s not like he’s going to go a whole lot higher, but I also don’t think he’ll return to being the fragile player he once was, either. Can we say hold and buy at the same time, Kamakshi? I told you I don’t know anything about stocks.

Steve

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Hi Steve,

The Dow Jones index is an aggregate of the traditional biggest US stocks—I’m not sure anyone knows what it really means. It’s just good to have numbers to hold on to, the way we do with player rankings.

Investing in a player is a tricky business, even if we're just doing it psychologically rather than financially. How do you tell how a player is going to do in the year ahead? And with younger players, how they’re going to do in their careers?

There’s talent, body, mind, heart, luck, teaching; you can get a feel for each of these things individually, but it’s hard to figure out how they’ll all work together to make a player either soar or struggle. I blogged for you from Toronto a few years back (2006), and we talked about the young guns then—Nadal, Djokovic, Murray, Berdych and Gasquet. Nadal had separated himself from the pack by that point, but all the others were still fairly even, at least in my mind. And look at the difference between Djokovic and Gasquet now. (We also talked about Philip Bester (where is he now?) and Gael Monfils (he's still pretty much where he was).)

Still, I’d be pretty happy with my portfolio if I’d put real money in these guys then, especially with Berdych finally paying off a bit. But if you want to sell them off at their peak, it might have been smart to let him go after the U.S. Open. I don’t know how well he’s going to do this year with his confidence shaken after a miserable second half of the season. I’d hold on to Nadal, Djokovic and Murray for now, though there’s concern about a Nadal bubble if the knees aren’t miraculously cured. Gasquet I’m giving one more year to make something of all that ridiculous talent—if only he had a fraction of the body, head, heart and luck to go with it. Then I cut my losses (though more than likely, right after that he’ll shoot up and reach a Slam final.)

The next lot was Juan Martin Del Potro, Marin Cilic, Ernests Gulbis, and Thiemo de Bakker, who are all around the same age. I would have expected these guys to start showing something last year, so now I’m a little impatient. Gulbis was always going to be a heartbreaker, but like the latest tech stocks, you just can’t help yourself. Cilic I’m surprised by, because he’s too level-headed to be slumping like this, and it makes me wonder what’s going on. Del Potro—the body, we always knew it. The mind—that’s the big question mark now. De Bakker needs to be nicer, that’s all I can tell. Maybe it would help.

Two guys who have done better than expected are both American—Sam Querrey and John Isner. But then there’s Donald Young—yikes. He was right in there with Cilic and co, destined to be the touch player in that group. A reminder of the risks of the stock market.

If I were doing my long-term investing today, I’d be choosing from among Grigor Dimitrov, Ryan Harrison, Richard Berankis, Bernard Tomic, and Filip Krajinovic. I haven’t had a chance to watch them much because I wasn’t able to go to that many tournaments last year, so I have more questions than answers.

Dmitrov is supposed to be baby Fed, but wasn’t Gasquet? I was completely bowled over by Harrison’s poise during his turn at the US Open, but is he really going to succeed in his quest for the perfect all-round game, and how long will it take? Berankis has great mind and heart, but is he too small? Is Tomic too much of a controversy magnet? I hear the Aussies saying Jason Kubler is now supposed to be as talented as him, but that might be just hopeful thinking given the headache Tomic and Brydan Klein have been to Tennis Australia so far. Krajinovic—is he real or just a product of the Bollettieri hype machine? I was also impressed with a Canadian teen, Milos Raonic, at the U.S. Open. Dmitrov is a buy after strong challenger results last fall, and Berankis and Raonic are two who are likely to go up this year even if their long-term potential is a bit more unclear. Waiting a few months on Harrison to get a better sense of his trajectory.

Are you still reading? I'm well off the Dow now and into the venture exchange, where the shares are cheap but any payoff far off.

Going back to thinking about the year ahead, you finished with a 'buy or sell?' on Melzer, a guy I've been 'invested in' for a while. By that I mean guys you see when they’re young and low-ranked, and think Top 30, Top 20, or Top 10—after that, you always want to be right. Melzer finally did last year what he should have done long ago, but at this stage isn't likely to take things to a new level. I’d sell, but happy that he finally capitalized on his talent. Unlike a certain Feliciano Lopez, I might add. (Sniff.) Kristof Pless. Mischa Zverev. I could go on.

Well, by now you know that I'm not going to be a fund manager any time soon. I'll wait till next time to go into the much more bearish women's market, but here's a few more guys who are in the 'buy or sell? Or both?' list. They all feel like they're on the cusp of something, but what?:

Marcos Baghdatis, Lleyton 'workin’ harder than anybody' Hewitt, Andy Roddick, Fernando Verdasco, and of course, Roger Federer.

Kamakshi

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