Portfolio Strategy Pt. #6
What I'm Buying & Why!
Investors,
Welcome to the second-to-last edition of “What I’m Buying & Why”, an exclusive series for paid members that I launched in early September! At this point in the series, we’ve covered 10 individual stocks, breaking down the qualitative investment thesis, financial performance, and shareholder return of each company. In this report, I’ll be explaining the qualitative investment thesis & portfolio strategy of 5 exchange-traded funds (ETF’s). ETF’s are a powerful tool, allowing investors to diversify into specific investment factors, themes, sectors, and industries. They are extremely beneficial for passive, long-term investment strategies, allowing an investor to steadily increase their exposure to hundreds of companies simultaneously. By doing so, they allow the fund’s portfolio managers, investment analysts, and natural market cycles to control the strategy and individual stock allocations.
On net, the 15 individual stocks & ETF’s within this portfolio have performed extremely well and erased substantial YTD losses. Since their respective YTD lows, which broadly occurred in mid-October, here are the returns for each position in this highly efficient portfolio:
These are high-quality stocks & ETF’s that I have long-term conviction in; however, they also provide dynamic short-term returns. For context, the S&P 500 is up +14.2% since the mid-October lows, meaning that 80% of the stocks/ETF’s above are outperforming the broader market within the latest uptrend. Once we transition into an unequivocal bull market, I expect these investments to compound much faster than the S&P 500. They have the track record to prove it.
All of these companies are profitable. The majority pay a dividend and/or offer a substantial share repurchase program. Management teams have steered their companies through a variety of economic conditions. The majority have outperformed the S&P 500 on a 3, 5, 10, and 20 year basis. I can’t stress this enough: they are proven winners, and I believe that they will continue to be winners (in terms of operating performance & generating shareholder value).
In the final version of this series, set to be published on Wednesday, November 29th, I will share 20+ different stocks that didn’t make the cut in this 15-position portfolio. After 9 years of analyzing stocks & the market, I’ve built an extensive library of companies that I love. This series isn’t intended to tell you what to buy, but rather to show you how I approach individual security analysis, portfolio construction, and long-term investment strategy. My hope is that these 20+ other stocks help to expand your horizon of investment-quality companies.
Without further ado, let’s jump right into the actual analysis: