The following 5 stocks now constitute about 50% of my entire Portfolio B holdings. With all five of these, I’m in it for the long haul. For readers who tend to skip over my Professor Frink posts, but are investing for retirement, these are the five stocks that I’d suggest investigating on your own:
CNQ – Canadian Natural Resources – Today I carried out the plan I’d had for a week, to buy up a big chunk on the first correction or cross-market dip, which happened this morning. A theme you’ll see in the future with stocks I tend to favor is a critical aspect of my belief in this one in particular, and that is the edge in management talent CNQ has over its competition.
BAM – Brookfield Asset Management – This is a pick I made early into the launch of Portfolio B ($1M), and my buys were based solely on annual performance and my admiration for the talent of this firm’s management, in their ability to implement original business strategies in a sector that is full of squirrels all chasing after the same nut.
PRU – Prudential – A stock I’ve included in both portfolios since their respective inceptions, and in terms of management, I feel this company is at the head of the pack. Prior to going public about 5 years ago, a widespread shedding of institution-type dead weight took place throughout the company, along with the tired, ineffective management trends that went out with them. Headquartered in New Jersey, I’ve been unable to pick up on any tarnish in the local papers in the last couple years, the likes of which has hindered the stock performance of AIG and other competitors.
ADBE – Adobe Systems – This one is predicated less upon the stock’s fundamentals or its management, but almost solely on the quality of its products, the business strategy already in place for delivering these products to consumers and the fact that its signature product is the tool of choice for graphic arts organizations, regardless of (to me) an eye-popping cost. Apple PCs are gaining market share, and Adobe is partnered closely with them. I’m not expecting any breakouts in the near future, nor am I concerned about this year even. My target hold period for these shares is close to 5 years.
PBR – PetrolBrazil – A couple years ago I spent a lot of time researching the energy industry, and attempted to find the perfect producer/seller for my particularly burdensome ethical streak. Without getting into particulars, back then I posted on this company, and I’m still a believer today.
Pretty energy-laden picks; from what i read BAM has a small amount of exposure to alt-energy; but alot of power/utilities. I like what Ben Stein had to say about old people retiring soon, he loves JNJ for long term.
JNJ over 10 years is a solid play indeed! I’ve been more cautious about pretending to have a firm grip on the medical aspect of the boomers retiring, in terms of the market…but with JNJ’s coverage over all those medical devices, stents, implants, etc…seems like they gobble up every new profitable product manufacturer in the sector that they can. With this in mind…I’m going to have a good time working the numbers here.
One concern I have though, is that the pricing of these products now exist in an inflation-crazed market, and whether or not ten years from now, they are forced to cut their margins due to the government passing laws allowing Medicare to shop around…whether or not the FDA becomes unrigged and more competition friendly in their process and approval for foreign competition.
The patents…I don’t understand at this point how long the average patent on a device to (for instance) improve blood flow around the heart lasts, and a couple of these I’ve read in the past year, haven’t proven out in long term post-op trials as advertised. One in particular that is manufactured by JNJ is supposed to help the blood in some way, without increasing blood sugar, or something else…anyways.
I get spooked by what I don’t understand about a business more than I should in most cases…if you asked me what the Cox-2 drugs would mean to Merck, I’d have predicted much worse than them having made up all the ground they lost 2-3 years ago when the news first hit. They’re still in the papers, battling out cases individually…so they’ve got enough money to turn what looks to be bad for an investor, into a speed bump.
A giant like JNJ probably applies to this principle, but on an even greater level. I’ll have to check out Ben Stein…where does he write on the net?
Sick thought…but if health care is socialized in this country, then all the uninsured who’d been eating fast food and doritos their entire life will be able to have the type of surgery that JNJ profits from…higher volume, certainly lower margins if that were so, but it was one upside that just popped into my head.
On my picks – I’ve also increased my holdings in TS – Tenarsis ADR, Argentina steel manufacturer, to the level I’m at with the average of these five. This is a 2-3 year hold, determined by whatever data I can get my hands on pertaining to the annual capacity increase for China’s own steel mills, which is growing, but not fast enough to affect the contracts already being worked from now until 2009 as I see it right now.
I can’t think of a better way to go forward in the next five years in the energy market than CNQ and PBR…I had a slate of about 10 I was tracking a couple years ago, but have always favored these two in particular. I’m a big fan of Brazil’s energy policy in general, using a 50% blend of sugar ethanol, and with a state that stretches out every barrel used domestically like that, I get the impression that 5 years from now they’ll be in a better spot to rake in more through exports than other corporations of their kind elsewhere.
BAM is a great stock…it’s tough for someone not familiar with the company to get their arms completely around what is done there, but I’d put it quite simply as, “buy for 1, sell for 2”
Thanks for taking the time to read through these…nobody tends to pay any attention to my posts on investing or technology (hence my professor frink image that accompanies most of them)
stein writes for Yahoo! finance quite a bit and then of course he is on CNBC alot; i usually read his Yahoo! articles
if you were to know me, thats the thing I enjoy talking most about. unfortunately, I am limited in my investment activities at my present age. But I do hope to have my kinks worked out by the time real cash flow begins.
I’ll post an update of my two fantasy portfolios today – I’d be interested in getting your take on them.
Right now I’m researching S. Korean ADRs that would enjoy the new trade deal we’re close to establishing w/ them.