Chart update,
Ted was correct when saying stocks can go up when losing money. Say they are innovative and first in market : amzn or tsla.
Bottom line their are turnaround stories where an established profitable company utilizes core competency for a new application and investment/earnings take a short term (1 to 2 year ) dip down, These are the ones to look for.
They have solid balance sheets and very often pay a dividend.
An example of this was Brooks as they applied their semi equipment money into cryo cold storage and built an innovative industry with destructive technology for storing cold samples in the Big Pharma industry. It gave the stock a 12 bagger.
If you are looking at Ted Warren stocks, my thesis is add another filter with solid debt free balance sheets, and a dividend.
This takes the sting out of long holding periods, as you are being paid to wait. Sell some puts on dips (hoping they get assigned and add some put premium to your quarterly dividend revenue). Re-apply those revenue streams and accelerate your position accumulation (dividends PLUS put selling premium very surprisingly compounds quickly - especially if the stock increases its dividend regularly.
This is a stock I've had for over 8 years. They have always been profitable and often debt free (as they are now).
It currently appears to be in its fifth wave of fast price rise after a long accumulation period. Some followers are on a ten fold here today. A very excellent EW'r has an initial target of $7.70 (which would be a 7 bagger for me if I had not added on breakouts) - which Ted says is safe to do. I'm now on a double with my total position after adding aggressively in the 3's and 5's.
In a life time of investing you will need to have 2-3 of these and margin is never again needed. Be debt free and enjoy a stable portfolio of dividend Aristocrats representing 50% of your portfolio - the barbell approach.
I started my "dividend aristocrat" accumulation later in life (upon retirement). I still have and continue to look for successful innovative companies like AMNF - PR, PUMP, COHU, TDS preferreds (25% of my portfolio). While my original other 25% has created a wonderful return. I have rebalanced the profits into Dividend Aristocrats KMI, CVX, XOM, VZ, T (which is now 75% of my portfolio due to my advancing age and now shorter life expectancy.
AMNF is now my second largest position in number of shares and they are adding additional markets (recently Florida and Texas) wanting to to become a nationwide maker of Italian foods - also a defensive play if a recession rears its ugly head. They are debt free pay 14.52 cents in dividends annually and have also paid 11 special dividends Last one this year was 10 cents. Although they are on the OTC, they grew their Q3 revenue by 21% YoY and grew their Q3 earnings by 81% YoY! They also do not dilute my position by offering options. Manage has a large position and pay themselves with a performance bonus which usually goes into them buying more shares. THAT is my definition of a management that is aligned with the shareholders (another "look for" feature of a great stock)!
stockcharts.com
Do you see the recent break out from a cup and handle?
Fun to watch the fast price markup stage drawing in more buyers and a subsequent increase in daily volume.
If we touch 8 I'll peel off 5% of my highest priced shares.
Hoping to reapply in a dip.
I'll be a long term holder of this one for a long time.
"As an investolator - You should SUCCEED!"
Thank You Ted.
Bob |
