My Wife Picks Stocks better than You

Four years later and my wife’s stocks are still outperforming the major market indexes. She doesn’t even know it but her spending habits pick far better stocks than most folks I know, including me. My wife doesn’t watch the market, actively invest in the market or care to look at a stock chart but she sure can predict where the money will flow.

On August 5, 2014, I put a collection of stocks together that represent the products and services of companies used most often by not only my wife but our family as a whole. I called it “My Wife’s Mutual Fund” and decided to treat it as a personal ETF or mutual fund that we would just hold over time.

Original Post:
August 6, 2014: My Wife’s Personal Mutual Fund Outperforms the Pros

Follow-ups:
February 21, 2016: My Wife’s Personal Mutual Fund Crushes the Markets, AGAIN

August 7, 2016: My Wife’s Buy & Hold Strategy Still Crushing the Professionals

November 19, 2017: The Wife’s Stocks Outperforming 3 Years Later

Every one of these companies are a household name selling a product or service that we all use, so naturally, they will grow as a group.

As of November 11, 2018, the 22 stocks have performed as follows (for purposes of the exercise, no trades have been made):

  • Total gain of 108.26% (adjusted for dividends & splits)
  • 20 of the 22 stocks show a gain
  • 20 of the 22 stocks show a double digit gain
  • 13 of the 22 stocks show a gain of at least 50%
  • 8 of the 22 stocks show a gain greater than 100%
  • The leading gainer, also the 2nd highest initial priced stock, is up 448%: Amazon $AMZN
  • 2 stocks show a loss: $XOM and $KORS
  • A 91% success ratio

As a comparison, the return from the Nasdaq trails by 35%, the DJIA trails by 46% and the S&P 500 trails by 58.5%. In dollar terms, $5,000 invested per stock in the portfolio (or $110,000) would currently sit at $229,088 for a pre-tax profit of $119,088. Alternatively, $110,000 placed in the Nasdaq would result in a pretax profit of $77,178, $64,005 for the DJIA and $49,311 for the S&P 500.

What started as a playful review, became a serious pursuit of stocks that we decided to grab shares in. We don’t own every stock on the list but we do own and have owned many over the years.

I agree with my sentiment from last year, now nine years into a run from the bottom:

I’m not surprised to see, after years and years of gains (pre-2014), that these stocks continue to outperform the general market indexes. At this point in 2017, I believe that many of these stocks will continue to outperform in the years to come (and I’m making this statement deep into a multi-year up-trend).

Many folks and gurus on social media try to get fancy and make predictions to actively buy and sell the next great thing. Perhaps that works (not likely) so why not just accumulate shares in the best companies with the most useful products and services and call it a day. Predictions are fun and subscriptions must be sold so fintwit activity is needed but I bet this buy & hold portfolio has beaten the results of most strategies. And the best part, it’s free.

Howard Lindzon (@howardlindzon or howardlindzon.com) has a very similar list titled 8 for 80 which shares several of the names listed here. What he says about his list rings true for any list:

“No index or list is perfect…and mine will keep evolving. The secret sauce over time is not so much the list itself, but the ability to adjust, allocate and manage risk as you go.”

At the end of the August 2016 update, I suggested changing $KORS (an underperformer) for $MSFT. For purposes of the blog thread, we didn’t change a thing but that one adjustment would have resulted in a 98% gain for MSFT vs the 5% additional loss for KORS. To Howards’s point…”adjust”.

The portfolio of 22 stocks:
$AAPL – Apple
$SBUX – Starbucks
$GOOGL – Alphabet
$AMZN – Amazon
$FB – Facebook
$COST – Costco
$TGT – Target
$TPR – Tapestry (formerly Coach, COH)
$KORS – Michael Kors
$CVS – CVS Health Corp
$NFLX – Netflix
$DIS – Walt Disney Co
$JNJ – Johnson & Johnson
$PG – Procter & Gamble
$V – Visa
$MA – MasterCard
$PEP – Pepsico
$TJX – TJX Companies
$HD – Home Depot
$VZ – Verizon
$XOM – Exxon Mobil
$WFC – Wells Fargo

Stock Trends for 2018

If you thought my Stock Trends for 2017 list was boring (same old stocks), just wait until you see the creativity of this year’s list. I said this last January 1st:

“Perhaps this list is old and boring (Buffett likes boring) but we’re here to make money, not be sexy.”

So, let’s get into the mind of Buffet, which will explain why I am going to “let it ride” for now…

“There seems to be some perverse human characteristic that likes to make easy things difficult.”

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

“It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.”

Many of the stocks that I profiled in 2017, were the same old stocks that I profiled in 2016 and 2015. Following the trend has worked well so why should I try to get fancy, chasing a few percentage points here and there while increasing my risk? The 2017 portfolio returned nearly 42% and the basis of the setup didn’t include any sophisticated buy and sell rules. It was a simple buy and hold strategy. I’ll take 42% any year, hands down!

The current market run from the bottom in March 2009 will reach nine full years in 60 days. It has been an amazing run with amazing stats along the way. At some point, the trend will end. Unfortunately, no one knows if that will happen tomorrow, sometime in 2018 or at some point beyond 2018.

Take a look at these amazing S&P 500 stats:

  • The S&P 500 has had nine consecutive positive return years, tying the all-time record from 1991-1999 (we all know what happened in 2000).
  • Every month was positive for the S&P 500 in 2017, setting an all-time record, the first time that has ever happened in the history of the index.
  • In fact, the S&P 500 has been positive for 14 consecutive months, another all-time record.
  • The S&P 500 has been positive 14 of the last 15 years with only 2008 showing a loss.
  • The S&P 500 went 17 out of 18 years from 1982 to 1999, so perhaps there’s still room to run.

On the surface, the S&P 500 stats referenced sound like the end could be near but the famous quote:

“Markets can remain irrational longer than you can remain solvent”

keeps me from trying to guess. The “easy” thing to do is to continue playing until the market tells us otherwise. No one is smarter than the market and it will give signals when it’s over.

So, before I get into this year’s list, I once again suggest that 99% of all investors stick with low cost index funds and skip individual stocks altogether. Individual stocks are funny and carry too much risk for the casual investor.

*NOTE: the overall health of the markets must be positive for many these investments to do well.

Digital Currency & Blockchain:
Digital Currency has been on my list for several years and has worked well. I mentioned “blockchain and bitcoin” both in 2015 and 2017 but decided to ignore them as far as investments. Too bad for me as 2017 was the year of cryptocurrency.

Blockchain started to go mainstream in 2017 and I believe the mania will continue in 2018. The challenge with crypto currencies (coins, alt coins, tokens, etc.) is that 99% of the ones available today will not be here in the future, they are garbage or outright scams. Some may survive and new ones will be created but I suspect the leaders of these decentralized cryptos will start to emerge by the end of 2018. I am far from an expert on cryptos so please search elsewhere for advice on how and where to invest. The hope for crypto (and blockchain) is that the “technology” eventually supersedes the speculation and the intended benefits will be realized. (Disclaimer: as of this blog post, I own Bitcoin, Ethereum and Litecoin).

For a more traditional stock approach, these are the companies that I believe will continue to provide value and further upside through their stock shares:

  • V: 114.02. I continue to ride and hold Visa personally as it remains the world’s largest retail electronic payments network and is one of the most recognized global financial services brands. The stock returned 47% in 2017 and has been in an up-trend, above its 50-day moving average since last January. The stock provided a much better entry in January 2017, from a technical standpoint, but I am including again this year. As I said last year: “as a long-term shareholder, I’m holding, until it proves otherwise.”
  • MA: 151.36. Like Visa, MasterCard was also up over 47% in 2017 and has been riding its 50d ma since August 2016. The stock is currently trading sideways over the past several weeks, forming a base along the 50-d ma. My ideal buys are closer to the 200d ma but I will include Mastercard until it breaks down. Be careful buying any stock when extended.
  • SQ: 34.67. Square, Inc. was the one that got away last year. I went with PayPal (stocked up on $PYPL shares personally and it paid off with an 86% gain, I still own 50% of my original position). Personally, I still like PayPal (the company) but feel that the stock is extended so I am not including this year. I am going to take a chance on Square, a stock that went from $13 per share to as high as $49 per share in 2017. The stock has pulled back over the past five weeks, violating the 50d ma on heavy volume so we have to keep an eye on that (red flag). An ideal area to grab shares would be at or near the 200d ma, as long as it holds support. A violation of the 200d ma would be a big red flag. With all that said, I am going to take a chance on SQ. It carries with it some risk so be careful if you decide to grab shares.

[Read more…]

Stock Trends for 2017 Final Results

The results are in and the chrisperruna.com Stock Trends for 2017 outperformed the general market by a wide margin. The discretionary buy-and-hold (mock) portfolio logged final gains that were 48% larger than the Nasdaq, 66% larger than the DJIA and 115% larger than the S&P 500.

Final 2017 Results:

  • Stock Trends for 2017: +41.85%
  • Nasdaq Composite: +28.24%
  • Dow Jones Industrial Average: +25.08%
  • S&P 500 Large Cap Index: +19.42%

Final Results Fun Facts:

  • 20 of the 21 stocks show a gain for a 95% win ratio
  • 18 of the 21 stocks show a double digit gain or 86% of the stocks
  • 14 of the 21 stocks outperformed the three main US indexes
  • 8 of the 21 stocks gained more than 50% for an average of +69.23%
  • 6 of the top 10 gainers started as triple digit stocks (7 ended that way)
  • The top 10 performers had an average gain of +65.00%
  • The average gain of the positive stocks is +44.39%
  • The average gain of the positive stocks, with double digit gains is +49.16%
  • BABA was the top performing stock, with a gain of +96.37%
  • BABA peaked at $191.75 (52-week high), which gave the stock a +118% gain at the time

As 2017 ends, I maintain a bullish outlook on many of these names, heading into 2018 and beyond.

**Note: Adjusted close price adjusted for both dividends and splits.

Stock Trends for 2017 Portfolio:
$AAPL $AMZN $BABA $BCS $CYBR $FB $GOOGL $HACK $INTC $MA $MBLY $MIME $NFLX $NVDA $PANW $PYPL $TSLA $USO $V $VNTV $XME

The Wife’s Stocks Outperforming 3 Years Later

Back in August 2014, I decided to put a collection of stocks together that represent the products and services of companies used most often by my wife and family. I decided to call it “My Wife’s Mutual Fund”.

Original Post:
August 6, 2014: My Wife’s Personal Mutual Fund Outperforms the Pros

Follow-ups:
February 21, 2016: My Wife’s Personal Mutual Fund Crushes the Markets, AGAIN

August 7, 2016: My Wife’s Buy & Hold Strategy Still Crushing the Professionals

Based on past experience, I noticed that these companies were outperforming the market by a wide margin, especially on an individual basis.

What started as a playful review, became a serious pursuit of stocks that we decided to grab shares in. We don’t own every stock on the list below but we do own and have owned many over the years.

As of November 19, 2017, the 22 stocks have performed as follows (for purposes of the exercise, no trades have been made):

  • Total gain of 66.87% (adjusted for dividends & splits)
  • 19 of the 22 stocks show a gain
  • 17 of the 22 stocks show a double digit gain
  • 11 of the 22 stocks show a gain of at least 50%
  • 6 of the 22 stocks show a gain greater than 100%
  • The leading gainer, also the 2nd highest initial priced stock, is up 264%: Amazon $AMZN
  • 3 stocks show a loss: $CVS, $XOM and $KORS
  • An 86% success ratio

I’m not surprised to see, after years and years of gains (pre-2014), that these stocks continue to outperform the general market indexes. At this point in 2017, I believe that many of these stocks will continue to outperform in the years to come (and I’m making this statement deep into a multi-year up-trend).

I subscribe to a strategy of “keep it simple”. The run from March 2009 has certainly helped but these types of companies should continue to outperform going forward (a few may fall out of favor but the stronger ones will continue to dominate and innovative within their respective categories).

[Read more…]

Stock Trends for 2017 Beating the Market

The Stock Trends for 2017, comprised of 21 handpicked stocks (discretionary style), is beating the major market indices by a healthy margin. The Nasdaq Composite is the closest but still trails by four percentage points. In order to be even, the Nasdaq would have to improve its year-to-date results (12.24%) by 30%.

The Dow Jones and S&P 500 would have to more than double their year-to-date gains in order to match the portfolio gains.

Year-to-Date Results:

  • Stock Trends for 2017: +16.16%
  • Nasdaq Composite: +12.34%
  • S&P 500 Large Cap Index: +6.49%
  • Dow Jones Industrial Average: +5.96%

Note: Dividends not included in calculations.

Fun Facts:

  • 15 of the 21 stocks show a gain
  • 13 of the 21 stocks show a double digit gain
  • 6 of the top 8 gainers are triple digit stocks (5 started that way)
  • The average gain of the positive stocks is +24.77%
  • The average loss of the negative stocks is -5.36%
  • MBLY is the leading stock, with a 62.43% gain, after being bought by INTC (another stock on the list)

I will continue to follow the logic of the opening paragraph from the original post:

The trends that I am watching in 2017 are not much different than what I have been following and investing in over the past two years. As Newton’s first law stated, “An object in motion continues in motion…”. I could search for the “next hot thing” each year but why make investing more difficult than it already is when certain trends, technologies, products, services and companies continuously work.

The plan is to keep riding all winning positions higher, until the market trend changes.