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.

Summary

To protect the integrity of our picks, the focus stocks will be found in an article within the website each month.

These are the highest conviction growth stocks to add to asset allocations in November 2018.

Look to buy around the 200-day moving averages and when RSI falls below 30.

Use the "bottom fishing" prices for second entries on any stock that has violated the 200-day moving average.

Scale in using GTC limit orders and do not overextend on your asset allocation.

“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.” - Warren Buffett

Below are 12-20 growth stocks to focus on for long-term capital appreciation. Each offers a combination of value pricing and a growth profile that is expected to do better than the markets, as well as, analysts expectations.

I have included the stocks that I believe have the best combination of value and fundamentals coming into the month.

Summary

To protect the integrity of our picks, the focus stocks will be found in an article within the website each month.

These are the highest conviction dividend stocks to add to asset allocations in November 2018.

Look to buy around the 200-day moving averages and when RSI falls below 30.

Use the "bottom fishing" prices for second entries on any stock that has violated the 200-day moving average.

Scale in using GTC limit orders and do not overextend on your asset allocation.

“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.” - Warren Buffett

Below are 12-20 dividend stocks to focus on for growth and income. Each offers a combination of dividend income and a growth profile to support that dividend. 

I have included the stocks that I believe have the best combination of value and fundamentals coming into the month. 

Summary

We planned for an October buyback blackout induced correction beginning in August.

We came into this correction with high cash holdings.

It is time to be a buyer of stocks with solid fundamentals, good intermediate-term upward price momentum and a buyback plan.

Selling puts against cash holdings is also a very viable strategy in order to "recycle" your money again in a couple months.

While I am not a fan of having to trade more frequently, I have to listen to the markets. Right now, and likely through the next real stock market crash (#crash2020 anybody?), we will likely need to tweak our asset allocation several times per year. Now is one of those times. 

Our asset allocation strategy is in line with what we discussed in our 4th Quarter Macro And Market Outlook. Let's do a quick review of the last few years though, before we reiterate our strategy for the 4th Quarter.

Summary

  • A narrow focus stock list to help us find quality when prices give us an opportunity.
  • Per the 4th Quarter Macro And Market Outlook we are looking to become nearly fully invested temporarily on a market pullback.
  • Selling puts into December and January will be a focus, however, there are will be opportunities to build stock positions on a deeper market dive.
  • Dividends are overvalued, caution is warranted.

 

All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out. --- Peter Lynch

In real estate it is "location, location, location." In stocks it's quality, quality and asymmetric growth potential. The problem is that in the stock market, basically everybody knows who the quality stocks are. There are certain companies that only go on sale once or twice a decade, usually during correlated market corrections when "everything" falls in price.

ol·i·gop·o·ly

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noun

noun: oligopoly; plural noun: oligopolies

  1. a state of limited competition, in which a market is shared by a small number of producers or sellers.

The defining characteristic of oligopolies is that pricing power is concentrated with few suppliers of the good or service. This is the case with the DRAM semiconductor market.