Jubak's Future Fantastic 50 list of stocks [QCOM on list]
[Note: I nominated Globalstar (GSTRF) djane]
moneycentral.msn.com
Posted 7/16/99
Jubak's Picks
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stocks for the next 12
months.
50 Best
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Several hundred
thousand individuals
read Jubak's Journal
during an average
month. Let's see if
putting our heads
together can
produce a winning
portfolio.
Jubak's Journal
Join in! Build the list of 50 future winners
Let's use our collective brainpower to create the Future Fantastic 50 list of
stocks. Send me your vote: What companies, in five years, will be global
winners with staying power?
By Jim Jubak
If two heads are better than one, how good would several hundred thousand
heads be? Let's build a portfolio together -- one I'll call the Future Fantastic 50
-- and see.
When I first began work on what is now the 50 Best Stocks in the World
portfolio, I sat alone in an office at the magazine where I used to work, putting
the list together from piles of research and historical data. While I drew on the
work of lots of analysts and experts, the final list was the product of just my
mind.
I think that's a pretty typical example of how investing has
worked -- until the rise of the Internet. Whether you were
an analyst on Wall Street, a stock-picking guru or an
individual investor working from home in your spare time,
you made your stock picks in isolation, hoping that your individual brain could
produce insights at least as good as the average and maybe even better.
Most of what appears on the Internet still follows that model. We read (or produce)
columns that are the opinions of one individual: good, bad or indifferent.
Building a better meta-opinion
But I think there are signs on the Internet of another way. In chat rooms and on
bulletin boards, investors hope that the exchange of opinions among individuals will
result in a better meta-opinion -- one that is the shared work of the group. E-mail and
discussions with individual readers even filter into a column like mine. The
challenges and the new viewpoints raised in those exchanges do influence the
stocks I pick and my take on specific strategies.
I'd like to take that process a step further and actually build and track a portfolio
that's the product of the community -- as loose as it may be -- that reads Jubak's
Journal. For this portfolio, I'm going to take a step back and serve more as a
moderator for the group than as the author of the portfolio. Judging from our usage
studies, several hundred thousand individuals read Jubak's Journal during an
average month. Let's see if putting our heads together can produce a winning
portfolio.
Here's the process I propose. We'll start with a relatively familiar framework -- that of
the 50 Best Stocks in the World -- and then give it a twist. That earlier portfolio is
built around a qualitative screen: The stocks on the list represent companies that
have built a competitive advantage in their industry that is so strong that I believe it
will last for at least five years, even if current management is completely lame. (Or, to
borrow Peter Lynch's formulation, look for companies that will succeed even if idiots
ran them, because sooner or later idiots will.) That screen has resulted in a portfolio
filled with names such as MSN MoneyCentral publisher Microsoft (MSFT),
Wal-Mart Stores (WMT) and Gillette (G). These are established companies that
have demonstrated clearly over the last five years or more that they've got the drop
on competitors -- big time.
'Boy, I wish'
But now I propose giving this screen a small, but important, twist. Rather than
requiring a company to have demonstrated beyond the shadow of a doubt that it is
a global winner with staying power, for this new portfolio, let's pick the stocks of
companies that we think will be in that position five years from now. Summarize the
new portfolio this way: If you were to look at these stocks in July 2004, you'd say
about each one, "Boy, I wish I'd have bought that five years ago, and I'd sure be
willing to hold that one for another five years."
I'm going to get the ball rolling on this list by giving you a list of 30 of my own
nominees culled from the 50 Best in the World portfolio, from the current Jubak's
Picks and some new ideas. I believe that in July 2004, each one of these stocks will
dominate its industry or niche in the way that a Boeing (BA), General Electric (GE),
or SAP (SAP) does now.
And then I'd like all of you to help complete the list. Click here to nominate your own
candidates. Since there's a lot of tabulation involved, I'm going to set an arbitrary
limit of ten nominees per person. Tell me, if you want, why you'd put this stock on
the list. Or just send a name. Ignore valuations when you're casting your votes --
these are stocks to buy over the long haul and don't have to be cheap today. And
finally, feel free to trash any of the picks I've made below. Enough negative mail and
I'll throw a company off the list.
I'm going to make counting the votes a rather inexact process. I'll certainly consider
the number of votes each stock gets, but I'll also give weight to the arguments for a
pick. And a stock with one vote and no supporting argument can still make the cut if
I think it's simply too brilliant a choice to be ignored. I'm going to do the counting in
this subjective way because I think this process is closer to a free-for-all discussion
where an individual can carry a group simply by the force of his or her argument.
If you were to look at
these stocks in July
2004, you'd say about
each one, "Boy, I
wish I'd have bought
that five years ago."
This column will stay live on the site longer than the usual Jubak's Journal --
both to give everyone more time to vote and because I'll be taking a short
vacation. The deadline for casting your votes -- and having them count
-- is midnight on Thursday, July 22. I'll attempt to have the votes counted
and publish the resulting portfolio in my July 30 column. As best as I can in
that space, I'll give the details on how each stock made the final Future
Fantastic 50 list. And starting with that column, I'll begin tracking the
performance of the list through a live portfolio attached to each Jubak's
Journal. (If you've got a question on this process, send it as quickly as
possible to the Future Fantastic 50 voting site under question No. 2. I'm also
accepting suggestions on a name for this portfolio.)
So here are my own initial nominees.
Twelve from the current 50 Best Stocks in the World:
American International Group (AIG)
Applied Materials (AMAT)
Cisco Systems (CSCO)
Coca-Cola (KO)
Intel (INTC)
MCI WorldCom (WCOM)
Microsoft (MSFT)
Pfizer (PFE)
Sealed Air (SEE)
Texas Instruments (TXN)
Wal-Mart Stores (WMT)
Walt Disney (DIS)
In each case, I think the company is on track to extend its already sizable
advantages into new markets or to roll over existing competitors to pick up
share in the current market.
Seven from Jubak's Picks:
America Online (AOL)
Broadcom (BRCM)
Charles Schwab (SCH)
EMC Corp. (EMC)
Inktomi (INKT)
Network Appliance (NTAP)
Nokia (NOK)
I think all these companies show signs of dominating their respective
industries or niches. They'd make the 50 Best Stocks in the World, I believe,
if they had longer track records.
More…
And finally, 11 new ideas:
Exodus Communications (EXDS)
IBM (IBM)
JDS Uniphase (UNPH)
Oracle (ORCL)
Qualcomm (QCOM)
RealNetworks (RNWK)
RF Micro Devices (RFMD)
Sun Microsystems (SUNW)
TSI International (TSFW)
Vitesse Semiconductor (VTSS)
Yahoo! (YHOO)
That makes 30 -- just a start, but enough to give you the idea, I trust.
I'll be waiting for your votes. |
