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.

I have discussed Occidental Petroleum (OXY) in brief a few times. I originally recommended the stock for subscribers around $60 per share based on a combination of fundamentals and price trend analysis. The share price is about to test recent highs. If it breaks through, it could see old highs again near $100 per share in the next year or two - it currently trades around $76.

Occidental pays slightly above a 4% dividend yield right now and has recently become profitable on the back of quarterly YoY revenue growth at 25%.

Sierra Wireless (SWIR) is a company that I first investigated a couple years ago, liked, but didn't buy shares in as the share price took off on me. The stock subsequently doubled, but has since round tripped back to me. We have been accumulating shares for about two months. Here's why.

CenturyLink (CTL) has gotten plenty of bad press in recent years and a share beat down, but its day is coming as the IoT revs up revenues.

The stock market is testing the February correction lows and the S&P 500 (SPY) (VOO) 200-day moving average today. This is a key support level.

SPY 200-dayWhile we could see the first real bear market in a long time, per my chart from a couple months ago, I think the bear sleeps just a little longer. 

SPY RiskDepending on your risk tolerance, I think now is a time to put some cash to work. Not all of it, but enough to get more exposure to stocks than you had last week - presuming, you have been following my advice and raised some cash the past few months. 

I am at 32% cash, with almost half committed to cash-secured puts. I'm going to commit about half of what I have left in cash to more cash-secured puts and leave the rest for buying stocks or LEAPs if the S&P drops to that next support line. 

Stocks To Focus On (in order)

Summary

A lot of companies approaching correction territory.

Google is closing in, you'll want this baby maker.

Energy is seasonally low, buy it.

In real estate it is "location, location, location." In stocks it's quality, quality, quality. 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.