To get to my 10 picks for my Special Report: A New Core Portfolio for a New Market, let me start with the second half of that title, the new market part. Why do I think we’re headed into a new market–and what kind of stock is this new market likely to reward with gains? And then onto my 10 picks for a New Core Portfolio.
Take a look at Peloton Interactive (PTON) and Netflix (NFLX) just in case you need a reminder of one of the essential characteristics of this stock market. One that makes it so hard to tell where the market as a whole is going, and what individual stocks are headed up or down (and often down big time.) What growth rate should an investor use in trying to value the stock? Who knows? Which is exactly the point and not a problem limited to Peloton in this economy. I’ve found a handful of stocks with reliable internal growth stories that make them great buy-on-the-dip candidates for over performance in the second half of 2022. I’m making three of those stocks–Apple (AAPL), Disney (DIS), and Chipotle Mexican Grill (CMG)–my last 3 picks for my Special Report
In the first section of this Special Report: When will the selling stop? When to buy What to buy” posted back on January 11, I said that I’d look to buy in tiers. And thus stagger my buying to take account of any earnings season selling and any volatility around the Fed’s January 26 meeting. In the first tier, I said, back on January 11, I said I’d look for former momentum and earnings growth favorites, especially in the technology sector, that had taken big hits in the selling from the November 19 high. The three first tier buys were Nvidia (NVDA), Advanced Micro Devices (AMD), and and the first three buys back on January 11 were Nvidia (NVDA), Advanced Micro Devices (AMD, and Adobe (ADBE). I said I’d name my second tier picks after bank earnings. Which means today.
If you worry about what worries me right now, I know what you want to know. When will the selling stop? When will it be a good time to buy “bargains”? And What stocks should you buy when you begin to buy? Those are the three questions that I’ll answer in this Special Report. Along with listing my first three buys on this selling.
It’s been a while but I haven’t forgotten. Back on October 5 I named Intuit (INTU) my eighth pick in my Special Report: 10 Greatest “Savings Account Stocks. Which meant that I owned readers two more picks. Today’s pick of West Pharmaceutical Services (WST) is pick No.9. One more to go. (As with picks No. 7 MasterCard and No. 8 Intuit, I’m suggesting that you hold off on buying West Pharmaceutical until we see a bigger dip or what I now anticipate as the end of the current extreme volatility sometime around March 2022.)
It was sure hard to see a market melt up today, November 22. The Standard & Poor’s 500 was down 0.32% and the NASDAQ Composite fell 1.26%. Market leaders in the melt up rally like Applied Materials (AMAT) and Microsoft (MSFT) were down 1.65% and 0.96%, respectively. And it was even harder to see the trend I thought might be on its way in my Friday, November 19 post “Forward into the past with tech stocks:We’re seen this market before.” The rotation into tech stocks that I saw on Friday turned into loses of 3.12% for Nvidia (NVDA), and 1.92% for Alphabet (GOOG.)
But I suggest that you take a look at Apple’s (AAPL) performance today
This dynamic–a company and its stock gets hammered by supply chain chaos but we know the supply chain problems will end one day and that the company will return to business as usual (and we like that “business as usual”)–doesn’t apply only to chip and chip equipment makers. You can find it throughout the global economy and one of the most attractive situations–for investors looking for an opportunity–is oat milk producer Oatly Group (OTLY).
Today, October 5, I’m making Intuit (INTU) my eighth pick in my Special Report: 10 Greatest “Savings Account Stocks.” (As with pick No. 7 MasterCard, I’m suggesting that you hold off on buying Intuit until we see a bigger dip or the end of October and its volatility.) Here’s the tricky thing about finding great savings account stocks in the financial sector. In technology it’s “reasonably” easy to see what a company’s competitive advantage is and to estimate how long it will last. We can look at the intellectual property built up by a Nvidia (NVDA) and estimate the distance–and time–between the company and its identifiable competitors. This is much harder for a financial stock because 1) the sector is in turmoil with “disruptors” popping up like wild flowers after a desert rain, and 2) it’s not clear, much of the time, what a meaningful competitive advantage might consist of. But there are a few exceptions where a company has carved out a clear competitive advantage in a part of the financial market space. And I think Intuit is one of those exceptions.
Today, September 25, I’m making Adobe (ADBE) my fourth pick in my Special Report: 10 Greatest “Savings Account Stocks.”
Today, September 27, I’m making Nvidia (NVDA) my fifth pick in my Special Report: 10 Greatest “Savings Account Stocks.” You’ve probably noticed that now all five of the first five picks for this list of 10 Greatest “Savings Account” Stocks are technology stocks. Microsoft. Taiwan Semiconductor. Applied Materials. Adobe. And now Nvidia. And it’s only reasonable to ask Why?
Today, September 25, I’m making Applied Materials (AMAT) my third pick in my Special Report: 10 Greatest “Savings Account Stocks.”
