Of all the things you can say about the world of finance this year, it wasn't boring.
Looking back at the best and worst of Wall Street 2013, we've had record stock market highs, hyped up IPOs, activist investors gone wild, and red-faced moments for some prominent CEOs.
Some of it was sad, most of it was entertaining, but none of it should have distracted you from making money.
We here at Money Morning have created some very special awards to commemorate some of the most striking developments of 2013.
The 2013 Awards for Best and Worst of Wall Street
Best Hedge Fund Manager Smackdown: Icahn vs. Ackman
Back in January, Bill Ackman, head of Pershing Square Capital management, went on CNBC to defend himself against a verbal attack that iconic hedge fund manager Carl Icahn had made the day before on Bloomberg TV criticizing Ackman's "holier than thou" short position on Herbalife. After the first segment, Icahn called in live to respond, and the fireworks began. Captivated traders on the floor of the New York Stock Exchange shouted "Whoa!" with each verbal counterpunch. Some of the highlights:
Icahn: He is like the crybaby in the schoolyard.
Ackman: Carl Icahn does not have a good reputation for being a handshake guy.
Icahn: I appreciate, Bill, that you called me a great investor. Unfortunately, I can't say the same for you.
Ackman: I think that Carl either has a very, very bad memory or he had trouble with the truth. [After losing a lawsuit to me], he called me up and literally said, "Bill, we can be friends now." I simply said to him, "Look, Carl, you are no friend of mine."
Icahn: That's nonsense. I never said that I want to be friends with you, Bill.
Ackman: OK, Carl.
Icahn: You said to me, you'd like to be friends so that we could invest together.
Ackman: OK, Carl. You think I want to invest with you?
Icahn: I wouldn't do business with you if you were the last man on Earth.
Most Hyped IPO With Worst Long-Term Potential: Twitter
Yes, Twitter (NYSE: TWTR) opened 73% above its IPO price at $45.10. Yes, it raised a huge sum of $1.8 billion. Yes, founder Ev Williams became a billionaire straight out of the IPO via his 59 million shares. But beware of Twitter. The eight-year-old company posted a third-quarter loss ($64.4 million) that tripled from the same quarter last year. Net losses surged from $71 million to $134 million in the same period. And the revenue growth rate has remained roughly the same in the last two years. All these reasons, and more, make Twitter a big, red balloon with a pin held to its side.
Most Overdue CEO Departure: Steve Ballmer, Microsoft
Under more than a decade of Steve Ballmer's leadership, Microsoft Corp. (Nasdaq: MSFT) stock remained virtually flat. While the rest of the tech world moved on to the Mobile Revolution, Ballmer preferred to milk the cash cows of Windows and Office. In August, pressure from activist investors such as ValueAct forced Ballmer to announce his resignation, to be effective within a year. Since then MSFT has risen 21% to a 13-year high. That's not a coincidence, folks.
Best Attempt by a Central Bank to Destroy Its Own Currency: Bank of Japan
Federal Reserve Chief Ben Bernanke is a piker compared to the Bank of Japan's Haruhiko Kuroda, who announced in April plans to expand its balance sheet with $1.3 trillion of monetary stimulus by 2014. It may sound like it's in the Fed's ballpark, but with Japan's economy just a little more than one-third of the U.S. economy, the BOJ's effort would be the equivalent of the Fed tripling its own balance sheet to $12 trillion. True, all that money printing has done wonders for the Japanese stock markets, but it has caused the yen to nosedive against nearly every other major world currency.
Stock We Most Wish We Had Placed a Big Bet On: Netflix
Netflix Inc. (Nasdaq: NFLX) has seen its stock price soar an incredible 302% in 2013. Netflix stock had plummeted in 2011 when the company unwisely announced it was raising prices and switching its business model at the same time. Since then, the company has invested heavily in technology upgrades and has released two original series, "House of Cards" and "Orange is the New Black," which have both received rave reviews.
Currently, Netflix is trading at a forward P/E ratio of almost 88 times earnings, so saying it's a risky buy now is an understatement. But for those who had the foresight to purchase NFLX in January and hold on through December - kudos.
Most Unfortunate CEO Comment: Chip Wilson, Lululemon
Lululemon Athletica Inc. (Nasdaq: LULU) founder and chairman Chip Wilson could not have been thinking clearly when he chose these words to describe the clientele for his company's famous yoga pants: "The thing is that women will wear seatbelts that don't work or, quite frankly, some women's bodies just actually don't work for it."
Yikes. In early December, the company announced that Wilson would, ahem, be resigning as chairman. LULU stock has since had a rough go of it, down nearly 24% year to date. Insulting a major chunk of the company's client base certainly didn't help.
Best Zombie Tech Stock: BlackBerry
BlackBerry's (Nasdaq: BBRY) bid for a comeback with its BlackBerry 10 never really had a chance. Apple Inc.'s (Nasdaq: AAPL) iPhone and Google Inc's (Nasdaq: GOOG) Android devices had already relegated the once-mighty smartphone maker to irrelevance. But the company's leaders refuse to give up the ghost. Interim CEO John Chen actually felt compelled to write in a recent open letter to shareholders: "We are very much alive, thank you." But the whispers on Wall Street are saying, "No, you're not. You'll be stone dead in a moment."
Most Ironic Complaint: Microsoft on Google
Microsoft is one of several companies that have filed antitrust complaints against Google in Europe. Microsoft is upset that Google favors its own products at the expense of rivals in its search results. But it's hard to feel sorry for the Redmond giant. Back in 2001 a federal judge declared Microsoft a monopoly that had abused its dominance of computer operating systems to marginalize its competitors. That's what bad karma gets you.
Most Accurate Government Statistic: ????
This is a bogus category, as there's no such thing as an accurate government statistic. Says Money Morning Chief Investment Strategist Keith Fitz-Gerald: "Those statistics are more cooked than a Christmas goose."
Most Worthless Municipal Bonds: Detroit
The Detroit bankruptcy became official on Dec. 3. And with it, the city's general obligation (GO) bonds went from being the safest form of municipal debt to being no safer than junk bonds. Now, the ratings of municipalities across the country are suspect. Detroit's $18.5 billion problem has shaken muni bonds to the core. Meanwhile, the problem appears to be spreading, as these other eight cities are on the verge of bankruptcy.
Most Expensive Dinner: Cook & Icahn
Apple CEO Tim Cook probably regrets having had dinner with renowned activist investor Carl Icahn on Sept. 30. During the course of the meal Icahn urged Cook to use Apple's cash for a $150 billion stock buyback. Cook was polite, but agreed to nothing. Then, at the end of November, Icahn filed a shareholder proposal that Apple do a $50 billion stock buyback in addition to the $60 billion in buybacks it already has planned. "Apple is not a bank," Icahn told Time magazine. Now it will come down to a shareholder vote in February.
It's no coincidence that activist investors earned more than their fair share of best and worst awards. For sure, they created more noise in 2013 than ever. But for the typical investor, the antics of hedge fund managers are more than a sideshow. Here's how to profit when billionaires battle...