MG, Invitation
Not seeing any other acceptances of your invitation to fill in the blanks, I'll try my hand in a couple of the sectors.
First, I believe investment math is very simple as price is related to earnings and investor perception of the the future quality of earnings and the general Market environment. There are four possibilities: 1) Earnings Expand & PE multiple Expands, 2) Earnings Expand & PE multiple Contracts, 3) Earnings Contract & PE multiple Expands, and 4) Earnings Contract & PE multiple Contracts. Course (1) is a winner, Course (4) is a loser, Course (2) and (3) provide unknown results.
Second, I just can not see anything in the current Market environment that would remotely encourage anyone to Buy and Hold for the balance of the year. Third, I'm a Big Boyz contrarian at heart; focus on the Big Boyz and sit back and wait for the Market to kill them.
Finally, I like stocks where the PE multiple is selling near or below its projected future growth rate in EPS, near or below its 6 year historical average PE ratio, the PE ratio below its ROE, and generating positive cash flow.
The FA winners are: ALL, FTU, GM, MWD, ONE, and S. I'll be the first to say that this ignores current TA (for example, I would wait and hope for another shot at MWD in the 80's). Clearly, no tech companies make the list, and here you have to deal with relative over-valuation. That said, my tech pick would be HWP.
I'll provide some specifics of my FA view later.
Just a View from the Swamp
TB |
