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Strategies & Market Trends : Young and Older Folk Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (891)	4/1/2022 7:59:39 AM
From: chowder	1 Recommendation Recommended By red cardinal Respond to of 22054

Re: Young Folk Portfolio ... Add On Buy Yesterday a partial monthly contribution hit the account and with this cash I added to STE. In deciding what to add to, I looked at the smaller sized positions that I would like to build over time. In determining the objective I had to consider the current economic conditions which include inflation and higher interest rates, both of which can be detrimental to equities. These economic conditions often cause many businesses to be cyclical in nature and in this environment I'm looking for companies that shouldn't get hit as hard. What I'm looking for is secular growth. In finance, secular is a descriptive word used to refer to market activities that occur over the long term. Secular can also point to specific stocks or stock sectors unaffected by short-term trends. Secular trends are not seasonal or cyclical. Instead, they remain consistent over time. In order to remain consistent over time, a company has to be able to maintain high earnings growth in spite of inflation and rising interest rates, so I am looking for companies expected to show double digit earnings growth under the current condition of the market. STE is expected to show 28% earnings growth in 2022 and double digit earnings growth in 2023. The company is overvalued based on the company's intrinsic value. It is trading at a 6.8% premium to fair value but given the strong earnings growth expectations, I think it was a price worth paying. Companies showing strong earnings growth aren't likely to allow one to get a hero price. STE is now just above a 1/2 sized position and I expect to bring it to a full position at some point based on what cash will be available.