Long-term bucket pick #5: Deere (DE). Any stock that goes into a long-term bucket for a relatively conservative portfolio like this one, faces a tough test. You want the company to be tapped into some explosive long-term trend that will drive growth–but since this is a conservative portfolio you don’t want that trend to be totally or even mostly speculative.
Special Report: Fixed income investing is facing a crisis–3 tactics and 7 picks so you can fix your income investing crisis–Part 1, The Tactical Framework
The big arguments in the financial markets these days are about inflation–will it stay elevated at an annual rate of the better than 5% reported in May and June or will be fall to the 2.5% or so envisioned by the Federal Reserve–and interest rates–the yield on the 10-year Treasury fell to 1.21% on Monday, July 19 and some market strategists see 1% in the cards while others are looking for a 2.5% or even 4% at the peak of this cycle. I certainly won’t pretend the results of these arguments don’t matter. Inflation sentiment and interest rate projections are the two biggest drivers of stock and bond prices right now. (Well, maybe in the short term next to worries that a fourth wave in the pandemic will shut down the U.S. and global economies again.) But these arguments matter rather less than you might think to investors saving for retirement and those looking to generate some income from their portfolio either to fund retirement or some other predictable big ticket item (like monthly mortgage payments on a first or second (don’t I wish) home.) That’s because from that perspective the results of these arguments don’t change the portfolio cash flow picture very much
Two stock picks that are both growth and value to add to the Millennial Portfolio for long-term investors
Sure looks like a market struggling with rotations between growth and value stocks. One day the growth stocks sell off on fears of higher interest rates and rising inflation or something–and because after such a strong rally in the style growth stocks are very expensive. And that same day value stocks move higher because increasing economic growth is a very, very good thing for a style that depends on a strong economy for much of its revenue gains. The next day the market’s preference reverses and growth again outperforms value. What’s a poor investor to do? Especially the long-term investors with very long time horizons that are the focus for my new “Millennial Portfolio (for investors with more time than money.)” How about a few stocks that offer both growth and value? I’ve got two stocks today that I’m going to add to the Millennial Portfolio: Deere (DE) and Southern Copper (SCCO)
Special Report: How to find “real” green stocks–with 10 picks to save the planet: Part 2 when to buy (and sell) the trends
If any investor wants to figure out what trends to invest in and when are the investing opportunities created by global climate change and efforts to limit the rise in our planet’s temporary, you need to look at every system of signs for clues. That means looking at the obvious, the political discourse as represented by the climate change plans of the Biden administration and the positions staked out by its opponents on the right and left. It means looking at the slightly less obvious, the advertising and public relations spending by companies trying escape the worst effects of the efforts to control climate change (oil companies, for example) and by companies trying to position themselves as champions of the fight to save the planet. And it means studying the much less obvious such as the climate change accounting principles I described in Part 1 of this Special Report to see which actions will be privileged and which penalized by the rules for keeping the books. From my own take on those systems, I’ve come up with a list of climate change trends that I think are worth investing in–and a calendar for when I think you ought to put your money into these trends. In Part 3 of this Special Report I’ll give you the names of 10 stocks that I’d look to use to ride these trends. Today’s segment, though, is devoted to laying out a sense of when to put your money into specific phases of the overall global climate change trend. I’ve divided this “calendar” into three parts.
AI stocks–actually any stock with a passing acquaintance to artificial intelligence technologies–stood out on the upside today, April 13, in a generally ho-hum market The Standard & Poor’s 500, let me remind you, rose just 0.33% on the day. But AI stocks–by the most generous definition–scorched higher.,
Nvidia jumps 5.62% today on upgrade to revenue forecast and news of its first microprocessor for servers
Nvidia (NVDA) announced its first microprocessor for the server market today, April 12. Right now Intel (INTC) owns around 90% of the market for server processors. And the company also reported that first-quarter revenue “is tracking” above its previous forecast. Revenue in the quarter ending in April is now expected to be higher than $5.3 the billion, which Nvidia projected on February 24. Nvidia shares were up 5.62% today on the news
Based on existing analyst forecasts for earnings in all of 2021, the S&P 500 trades at almost 24 times estimates, among its highest valuations ever. To bring the multiple down to its long-term average of 16 times annual profits, companies in the gauge will have to make about 15% more than the equity researchers currently expect them to earn — in 2023.
In commodities world there are bounces. There are rallies. And then there are super cycles of higher prices that can go on for years on an imbalance between supply and demand. We’re had our bounce in copper. And our rally. Now are we seeing the emergence of a copper super cycle? I think the answer is yes.
In today’s YouTube Video “Avoiding Di-Worsification in 2021 in argued that the trend toward high yields on long-dated Treasuries–and thus lower prices for those bonds–should prompt investors to look beyond bonds and gold in their efforts to build diversified portfolios. I’m adding a copper miners ETF to my Millennial Portfolio tomorrow as a replacement for gold and to profit from the increased copper demand resulting from larger numbers of electric cars on the road over the next decade
It’s hard being a long-term contrarian investor in a short term market dominated by momentum trading. But I think the rewards from that discipline will be substantial–if an investor has a long enough time horizon to wait out short-term negative trends.
Today, I’m adding Natura & Company Holding (NTCO) to my Millennial Portfolio.