5 Biggest Market Blunders of 2011

Santa Claus has come and gone, but not everyone received pleasantly wrapped
gifts under the tree. No, some were given a lump of coal for their blunders,
mishaps and misdeeds. In fact, I can't remember a time when it was so easy to
find so many bad market blunders to choose from when compiling my annual list of
the worst of the worst missteps. In 2011, we saw bad management, bad decisions,
bad calls, bogus data and what could possibly be criminal malfeasance by an
über high-profile Wall Street titan: #5: NAR's Bogus Real Estate Numbers In
December, we received word from the National Association of Realtors that they
had overestimated their existing home sales metric for the past four years! The
NAR revised existing home sales 14% lower since 2007, a drop that represents the
loss of more than 2 million sales from the original bogus data. These numbers
tell us that: The nation's housing market is a lot tougher than we originally
thought. The credibility of the NAR's data cannot be trusted. Whether just an
error in calculation or an attempt to put a positive spin on the numbers, the
NAR's existing home sales revision is a reminder to be skeptical of trade
groups created to promote an industry. #4: Research In Motion's Decline A few
years ago, it was virtually unthinkable that Research In Motion (NASDAQ: RIMM )
would be a cellar-dwelling stock replete with takeover rumors, but that's how
far down the BlackBerry maker has fallen in 2011. The stock has lost 76%
year-to-date and now trades at an eight-year low. The popularity of Apple 's
(NASDAQ: AAPL ) iPhone and Google 's (NASDAQ: GOOG ) Android-operated
smartphones made the BlackBerry far less popular in 2011. Then there was the
massive worldwide service outage in October that lasted about three days, which
then was followed by a not-so-well-received apology and offer of free BlackBerry
apps. Research In Motion's troubles in 2011 show us that no company and no
stock is immune from suffering a devastating defeat. #3: Netflix's Double
Whammy Sometimes good CEOs make horrible decisions. That can certainly be said
of Netflix (NASDAQ: NFLX ) CEO Reed Hastings, who made two very poor decisions
this year that caused the value of his company's stock to sink 60% in 2011.
The Netflix decline began in earnest when the company raised its subscription
price . That didn't go down well with subscribers or Wall Street but even
worse was the company's launch of a new business called Qwikster . The theory
was that Qwikster would operate the company's DVD rentals, while Netflix would
concentrate on digital streaming. The problem was that customers would now have
to deal with multiple accounts, multiple credit card charges and multiple
headaches. After hearing a resounding chorus of negatives, Hastings pulled the
plug on Qwikster, but by then the damage had been done . #2: Meredith
Whitney's Bad Bond Call This year wasn't very kind to famed analyst Meredith
Whitney. Last December, the proprietor of the Meredith Whitney Advisory Group
appeared in a now-infamous 60 Minutes interview where she proffered a dire
warning about the coming wave of municipal defaults that would bring down the
muni-bond market. But rather than the hundreds of defaults predicted by Whitney,
there were virtually no municipal bond defaults in 2011. As a matter of fact,
municipal bonds were one of the best-performing asset classes this year. I think
Whitney is a brilliant analyst with keen insights, but the fact is that her bond
call for 2011 never materialized, and those who followed her advice missed out
on a lot of gains. Of course, Whitney could turn out to be correct on her
muni-bond default call, and if she is I'll be among the first to say she was
right. But in 2011, her bad bond call turned out to be one of the biggest market
blunders of the year. #1: John Corzine $1.2B Vanishing Act The bankruptcy and
alleged fiscal malfeasance at securities firm MF Global shook the financial
world. Former Democrat New Jersey governor, former U.S. senator and former
Goldman Sachs (NYSE: GS ) chief John Corzine was put in the hot seat by Congress
to explain what happened to the $1.2 billion in missing customer funds. Corzine
famously told Congress, "I simply do not know where the money is." That sad
coda came after thousands of investors lost big money in MF Global, and after
more than 1,000 employees were laid off when the brokerage house went bust in
October. This infuriating story demonstrates that even politically connected
Wall Street titans can put investor capital in jeopardy . Because of the size,
scope and negative implications the MF Global meltdown has had on investors on
Main Street and Wall Street, Jon Corzine and his firm's bankruptcy easily win
the award for biggest market blunder of the year. This article originally
appeared on Traders Reserve .