I have some money to invest, and I'm trying to decide which stock(s) I should add to my portfolio...My current positions/allocations are as follows:This "new" Cash to be spent! (9%)Existing cash (4%)NVDA (24%)PANL (15%)TNDM (15%)SIRI (13%)UA (9%)TXT (7%)LL (2%)F (2%)I was thinking about picking up some shares of MKL with about half of the new cash, and adding to my position in LL with the other half. I've also got my eye on C, AKAM, and YUM.Thoughts/suggestions?
What criteria did you use to select these particular stocks?BruceM
In isolation this doesn't tell us much - can you give more context?
As others have stated .... we need more info?> What is your time horizon?> What is your age? It makes a a big difference if you are 25 as opposed to 55. For example only 1 or 2 of your stocks pay dividends. Quality Dividend paying stocks with dividend reinvestment can substantially increase your portfolio value over time.> What is your risk tolerance on a scale of 1 thru 10 with 1 being ~ "If I lose it all no big deal to 10 ~ I can't afford nor am I willing to lose even 2% in value! Best Regards & Happy New Year,Rich
Good points...more info:I'm 27 years old and, and my time horizon (assuming nothing changes the fundamentals of these companies while I hold them) for this cash is at 5-10 years. I have a high risk tolerance, and enjoy investing primarily in small to mid-cap stocks with decent growth prospects and good cash flow...or anything selling at a discount to its intrinsic value.LL (in my opinion) is selling at a discount because of its (most recent) hugely disappointing quarter...blamed on a new SAP software implementation which should improve the overall efficiency of the company. Couple that with their rapid growth and decent cash position, and I enjoy the investment immensely.I have great faith in MKL's management (esp. Thomas Gayner) and their (his) ability to beat the market investing their float over the LOOOOONG term. I wouldn't have any problem holding MKL for 30 years, but hoped to get in under $370 per share, where I see them as a good value (and they currently trade at $380). In the end, I'm not to worried about buying within 3% of my target, though.I like C because of their rapidly changing (for the better) balance sheet, and believe they will reinstate their dividend by 2012...government unloaded their stake, institutional buyers stepping in...I like AKAM for their growth prospects and cash position, but feel they may have a pull back before the next runup. (haven't done a tremendous amount of DD there, but one for my watchlist)I like YUM because of their cash position, overseas growth, dividend growth, and market position.Perhaps one of my biggest problems in investing is that I don't focus heavily on diversification, but rather tend to view each security by itself...in essence how good I feel about holding individual stocks without seeing them as a group of investments in an overall portfolio. This haphazard strategy has served me well so far (though I've only been investing for ~5 years), but I feel like I should perhaps be a little more cautious and methodical with my money.Are there any stocks you have your eyes on which would be a decent fit in my portfolio, or any changes in allocation any of you might suggest to adjust my existing holdings.?
The brief analysis you offer on C, LL, MKL and so forth, may be correct or not, or may be correct in context...they may be highly relevant growth variables or interesting but not relevant.These, and other..many other...factors are what professional stock-pickers do for their individual and institutional clients. This is your competition. The liklihood that you will consistantly out-pick the broad market is remote. To have even a chance to beat the odds, over time, you'd have to spend a great deal of your time on stock, industry, economic and market analysis...and be good at it.I know its fun to try to pick stocks, and have bragging rights on those stocks you happened to hit right. Unfortunately if you are like most, you'll develop a defensive tactic of ignoring or rationalizeing your losses.Your best alternative is to accept that you cannot out-pick your competition and that your best approach to long term investing is to asset allocate across 4 or 5 classes using index ETFs, and leave individual stock-picking to those who do it for a living, even though the majority cannot even out-perform even their own indexes.BruceM
Fair enough, Bruce.I admit I haven't offered every reason I've decided to purchase each stock, and you're right to be skeptical (this 27 year-old punk thinks he can compete with professionals).Between my family and day job, I'm doing my best to make an effort to research appropriate investing techniques...currently digging through The Intelligent Ivestor (http://www.amazon.com/Intelligent-Investor-Definitive-Invest...) and trying to familiarize myself with rudimentary technical analysis (http://www.amazon.com/Technical-Analysis-Works-Institute-Fin...). Given my background in Software Engineering and Mathematics, this stuff is right up my alley.That said, I see nothing wrong with piggy-backing on the ideas and research of others as long as I'm able to verify the information presented. As Rick Munarriz wrote in the front page article Monday (http://www.fool.com/investing/general/2011/01/03/this-is-how...), "online discussion boards -- including the dedicated forum for Motley Fool Rule Breakers subscribers as well as the free community hub at Fool.com -- are there to cash in on the wisdom of crowds."This is why I decided to ask you all for potential ideas or thoughts on mine....no sense in inventing the wheel if someone else has already done so. I have no intention of blindly stepping into someone else's "hot" stock idea without researching it first. Sometimes I'll watch a particular security for six months to one year before I decide to take the plunge (LL, for example)...sometimes it will only take me a few weeks to decide (TNDM, for example). I try not to brag, and will give credit where credit is due (thank you, by the way, to Rich W. for your email suggestions!).With all due respect, Bruce, I believe it's certainly possible (and highly probable) that I will continue to beat the market. I refuse to put my money with that "majority [who] cannot even out-perform even their own indexes." I'll make some great picks and some terrible ones along the way, but you can guarantee I will learn something from each and every one (and I've already learned NOT to ignore or rationalize my losses...I don't mind admitting defeat if something changes the fundamental reasons for my owning a stock...or doubling down if I believe a drop is unmerited).In any case, let's give it 30 years and see whether you're right about me. Either I'll be a happy man, or I'll be thinking about catch up contributions to my retirement accounts.:-)
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