Investors are scared, people are trying to figure out if we’re really in a recession, and even President Bush is doing his part to help stimulate the economy. Instead of getting scared and jumping off the investing boat, just make sure that you have a diversified portfolio that can perform as well as possible because past recessions have not lasted longer than about a year and stocks are still going to do well in the long run. Five years from now, we will not be scared of subprime mortgages, credit crunch, or oil prices hindering consumer spending. Ten stocks that I am trying to buy or have already bought (every stock with exception of Aluminum Corp and Schlumberger) that I believe will do well in the long term are as follows (in no particular order):
1. Las Vegas Sands (LVS)
2. Wynn Casinos (WYNN)
3. Aluminum Corp of China (ACH)
4. Schlumberger (SLB)
5. Cemex (CX)
6. Wachovia (WB)
7. Trinity Industries (TRN)
8. Sandisk (SNDK)
9. Broadcomm (BRCM)
10. Valero (VLO)
With the list above, I believe I have a good combination of large cap companies, companies in various sectors, and most importantly, companies that have the capability to weather rough times. A truly diversified portfolio would require at least 25 different stocks (mutual funds must have 20 different companies in their investments according to the SEC) but not all of us have enough money to purchase that many different companies.
Also foreign revenue on average accounts for 30% of companies revenue and a good number of the above companies have healthy international exposure. It’s never a guarantee that they will all make money from this point in time, but I think it’s a portfolio with a lot of upside. At this point in time, Wachovia is the riskiest investment, but assuming they don’t cut their dividend, I’ll take their 8.3% dividend. Also I prefer Las Vegas Sands and Wynn Casinos over MGM because I believe their casinos are stronger and the growth in other countries are much better for the former two.
Speculation play: If Wynn Casinos is able to acquire a gambling license to build a mega casino hotel in Tokyo, it’s going to blow through the roof.
January 22, 2008 at 12:36 pm |
I like the spread
just out of curiosity, why ACH over, say, Alcoa?
PS. Schlumberger is SLM.
January 24, 2008 at 9:44 pm |
Wachovia is a bank. Are you sure it is still viable? I don’t think the housing crunch is over yet. Dividends are nice, but most likely they will be decreased in the future.
January 26, 2008 at 4:36 pm |
I also don’t like SanDisk. Their patents are about to expire and flash memory is a commodity now. They face heavy competition from Samsung, which also does other electronics. SanDisk is a one trick pony. I have still yet to see Solid State Memory take over hard drives. It is still too expensive and there are many reliability issues.
January 26, 2008 at 4:43 pm |
1) Why do I prefer ACH over AA? Well, they’ve fallen more from their yearly high, they only have half the outstanding shares with a higher EPS, lower debt/equity ratio, and Chinese growth is still there (they’re poised to overtake Germany as the number 3 economy in the world). They don’t have a 2%+ dividend like Alcoa but we’re looking for some higher rates of capital gains.
2) Even if the dividends are decreased, I’m sure they’ll still be over 5.5% which would make them much more attractive than what Wachovia will actually offer you in a short term or long term CD. Also it’s all about timing, if you were able to get in to Wachovia at 28.50 just last week and sell them for 38 this week, you just made yourself a pretty 30%+ gain. Not too shabby. I’m getting back in anywhere below 31.
January 28, 2008 at 11:33 pm |
solid-state memory has been a commodity for years now. it’s traded on dramexchange.com
anyway, i think i’m in the wrong industry 
Re: ACH – i’m a little skeptical about sustained economic growth in China, or whether it’s a bubble (honestly, i don’t know enough to pass judgment). Ultimately, I think both ACH and AA will be directly tied to the price of aluminum.
February 1, 2008 at 1:38 pm |
In response to ACH, aluminum demand has a lot to do with the health of the housing market and also the overall economic growth. At this point in time, China doesn’t even need to be able to sustain their current growth and they would still be in better shape than here in the US. Yes, both will be tied to the price of aluminum but if you have sluggish or negative growth in the part of the world you’re trying to sell aluminum, then it doesn’t matter what the price of aluminum is. Today ACH and AA both invested a 12% stake in the Anglo-Austrlian mining company Rio Tinto (RTP)……….result: AA up 3.6% and ACH up 13.49%
February 4, 2009 at 9:28 pm |
My list for 2009 (not comprehensive):
http://tabulacrypticum.wordpress.com/2009/02/04/the-stock-pot/#more-336
February 15, 2009 at 6:13 pm |
Thanks for the list Randall. It’s hard for me to put any of my bets on banks at the moment, but energy is a favorite of mine. My “Stocks to Invest in 2009″ posting will be up very soon.
February 15, 2009 at 10:49 pm |
Looking forward to it, hay. Out of my list, IAG and COMS are looking good so far…