Stocks

Stocks for the Long RunThis is a list of stocks that Fundamental Trends subscribers generally hold for extended periods. On rare occasion we might trade short-term on news or large price swings, however, we are generally on a 3 to 5 year time horizon. People who are looking to trade frequently are genearlly making a mistake. Not only are trying to trade against super computers, hedge funds and investment bankers, they are destined to miss the biggest moves by being "out" when something happens and they wake up to see the news and stock price move too late.

Our core criteria for buying any stock is that we believe it can double in price within five years as a worst case scenario. We believe in building in a "margin of safety" on each purchase.

Most stocks will be released to the public once we are done accumulating a position, generally four to twelve months after initial purchases are made. Often we will use selling cash-secured puts to build a position. Those trades are noted in the Options section. 

Many people will build a 20-30 stock portfolio over a few years and then slowly replace expensive stocks with cheaper stocks. It is a process designed for the patient, thoughtful, forward looking and emotionally controlled. Asset allocation is a seperate issue. Some subscribers buy nothing but stocks, but most blend with an ETF allocation. I recommend blending an ETF portfolio with a stock portfolio. Read the guide you get when you subscribe to learn how to build an asset allocation that is right for you.

Your strongest edge as an investor is the ability to evaluate a company and let the calendar work for you. Not only can you beat the market that way, but you can do other things with your time.

Our "Very Short List" is composed of 40 to 50 extensively researched companies that are poised to double, triple or more in price the next few years. The Very Short List list includes the more conservative Fundamental Leaders group of strongly profitable companies trading at value prices often paying a dividend and the Emerging Leaders which have catalysts that could lead to explosive growth. 

By following the deliberate Fundamental Trends investing and trading approach, investors can build positions in winning companies and ETFs to take part in what Warren Buffett considers the core of his success: "compound interest."

Our "Very Short List" is composed of 40 to 50 extensively researched companies that are poised to double, triple or more in price the next few years. The Very Short List list includes the more conservative Fundamental Leaders group of strongly profitable companies trading at value prices often paying a dividend and the Emerging Leaders which have catalysts that could lead to explosive growth. 

By following the deliberate Fundamental Trends investing and trading approach, investors can build positions in winning companies and ETFs to take part in what Warren Buffett considers the core of his success: "compound interest."

Our "Very Short List" is composed of 40 to 50 extensively researched companies that are poised to double, triple or more in price the next few years. The Very Short List list includes the more conservative Fundamental Leaders group of strongly profitable companies trading at value prices often paying a dividend and the Emerging Leaders which have catalysts that could lead to explosive growth. 

By following the deliberate Fundamental Trends investing and trading approach, investors can build positions in winning companies and ETFs to take part in what Warren Buffett considers the core of his success: "compound interest."

I added CenturyLink to the Very Short List yesterday and am buying it today.

The company will benefit from the merger with Level 3 through increased free cash flow, a wider network that will compete with AT&T and VZ and a $10 billion tax loss carry forward from LVLT.

CenturyLink currently carries a dividend of about 9%. I rate it a buy right now.

Over the next decade, with the emergence of autonomous cars and general Internet of Things, broadband usage is going to more than triple. The combined CenturyLink and Level 3 will be among the biggest beneficiaries.

In addition, there is a bump from Trump as his team believes that Net Neutrality ought to be watered down, that is, allow the carriers to charge more to distribute wholesale broadband to other companies without networks, but need networks. For example, they might cut a deal with a Netflix or Amazon for priority access to bandwidth for broadcasting content.

I am looking to raise cash today as the world just became a lot more uncertain. 

Potash represents another profitable trade in the stock, almost 10%. I am very likely to buy it back in the $15s which I think is a near certainty occurs again. Long-term the story is the same. Fertilizer is near or at the bottom of its cycle and fertilizer in the age of climate change is important. However, the cycles are slow moving. It is worth being conservative.

I recently bought two slugs of HP Inc on valuation. I am selling at about a 6% net gain in a couple months. Not hugely sexy, but pretty good. I am likely to buy this company back presuming nothing negative happens to the company. However, as I said on November 4th, I believe that President Trump runs a huge risk of being negative for the economy, even if deficit spending can kick the can down the road. We know corporate CEOs are already pulling back. Until a repatriation deal is cut - if one is cut - corporations are likely to keep pulling back. We should expect at least a mild recession or a "skip straight" recession in 2017.

Therefore, to dial down risk, I am selling POT and HPQ with intention to buy back at some point.