Tom and Mike, let's get our Master Buy List development under way.
Mike and I have had a general type of this list this past year and have had stocks that have risen and fallen off of it.
The idea I am shooting for here, is to develop a field of candidates that should be considered for the list and then, we can discuss the pros and cons of why a stock should be on list and whether another company is in a better sector with superior revenue and profit growth rates and better management execution.
We can have as many candidates as we are comfortable with, between the 3 of us we probably have at least 40 or 50 stocks that we have said "this is a great stock for the long run" or " huge potential for growth" etc.
Who knows we may even have more candidates than that. -g-
We are evaluating these stocks to go into the buy and hold portion of the portfolio. They are the stocks that have the best story, execution, the greatest growth of their markets and should have the greatest price appreciation over time.
once we get the names on the table, maybe we can all take turns and pick one or 2 at at time that we want to have in the long-term section of the portfolio. There are some stocks that we all would choose so, it will just be a question of who picks it. There may be some that 2 of us would hesitate on but that the 3rd person feels so strongly about that , it will make it into the portfolio.
we can shoot for any number that we want to place in our long-term area of the port. For risk diversification we probably need at least 10. I imagine we will find it hard to bring it in under 20. If we have 70 stocks that we all want in the long-term portfolio, and they are all equally weighted, we would have an index fund -g-
Obviously we have no Crystal balls and will make plenty of "mistakes" in the sense of leaving off a stock that will be the QCOM of 1999, so to speak, or have some stocks on the list and in the fund and will head south in price and not look back. -g-
Mike is out of town until thursday so this will take a bit of time to develop, but it will give us time to think about this.
We may find that we agree on the first 15 and then find that we no financials among the 15 and we might weigh the pros and cons of having C, Mer, or MWD in the LT Port.
Obviously time moves on and stories change as does the world around us, so maybe semiannually we could review our stocks and verify that we are still comfortable with the ones we have in the LT section.
With our list of 20 we can then either dollar cost average into them over 4 or 5 months, or build in buy orders to buy blocks of them "on sale" in the event of a big market sell-off in the next month or two. I do expect a market correction by the summer.
If we had a repeat of the crash of 1987,for example, we might decide that we would put all or most of the long-term money to work more quickly.
Please ask questions and if you have format modifications or a better idea for building our LT Buy List, let me know.
I am flexible -g-
This seem to me to be a more structured approach than just ad-hoc saying that we like stock X and Y and lets buy it and toss it in the LT Portfolio.
So I will nominate some candidates for consideration for the Long-term portfolio:
QCOM, JDSU, CMRC, ARBA, VERT, WCOM, RFMD, PMCS, CSCO, C,
XOM,
that's a start, I have purposely left stocks off. Also there are stocks I would put LT money into prior to XOM but it will foster discussion.
We can always clean house at midyear -g-
John |
