The US Fed announcement today went according to script with a 25-point cut to interest rates. Powell delivered a dovish message and it was important that he said that rates would NOT fall to zero. He's relieved he said that. The market wants cuts like a spoiled child which keeps asking for more and more. What must happen long-term is a fundamental change that strengthens the economy, built on productivity, good trade and fiscal policy and an educated population. It's like exercising as opposed to drinking. Remember: things change, like the trade better and changed by people who have a better understanding of the economy. He's become more defensive after the past 18 months.

The US banks reacted well to Powell's rate cut today, but a lower rate in general means the banks will struggle with shrinking margins. BAC is the most levered to interest rates, so you don't want to own this. He sold his shares over the winter when the Fed changed direction.

Fintech is growing, sure, and Square is a disruptor. Great business model, but its stock price has gotten ahead of itself, trading at 7x revenues--very expensive, with prospects of few or no earnings. There's a lot of good news built into their price.

How to build a portfolio Hold 20 stocks, equally valued, including those that are growthier with a higher valuation, but can produce above-average cash flows. You also want some cyclical stocks like banks, tech and consumer stocks. Add to that stable stocks, like consumer staples. Then, you re Caveat: Most of the time your timing will be wrong, like momentum stocks losing favour to growth stocks.

The biotech grandddaddy. A great company that's produced some fine drugs, but other technologies have taken the shine off this stock. New drugs haven't driven the stock up. It does trade at a reasonable 11x earnings. A decent stock and it's stable, but lacks the punch of its peers. It depends what happens in the US election in Nov. 2020 too.

It's too early to buy this. The trade war needs to be resolved, since China is so important to CAT. He doesn't own CAT because of its cyclical nature.

Earnings last night were a little short, though bang on on revenues, but their 2020 guidance was sharply down. The stock got hammered today, so feels the pain. It's a really good company suffering from 1) they haven't executed as well and had bad luck (a European cyber attack); and 2) their express division had missteps as well as upper management turnover. Also, the trade war hurts FedEx. Eventually, all these clouds will pass and things will be good at FedEx.

It's beaten up with all oil companies. HAL is one of the biggest oil service companies in the world. One problem is domestic: a presence in the Permian Basin where it's been a big problem getting oil to market (no pipelines). This problem is starting to do well and things should improve.

A behemoth in the asset management business. Passive (ETFs) has recently surpassed active management. That isn't good for Blackrock, because passive pays lower fees than active.

A favorite of his. It has a long-term positive because it's part of the long-term solution for high American healthcare costs. CVS bought Aetna (a health insurer) and has a pharmacy division, but most importantly 1,500 Health Hubs which deal with customers' chronic health problems, which is far cheaper than going to an American emergency ward. (Analysts’ price target is $70.88)

It's had a rough ride and should be worth a lot more. They are the biggest renters of heavy construction equiopment. free cash flow and have priving power. Revenues were up 14% year over year. Be patient and this will pay off. (Analysts’ price target is $161.94)

He didn't own an airline until he bought this recently, because airlines were do cyclical. But now the airlines operate so precisely through tech and operate at full capacity far more than before. So, revenue-per-mile is high. This trades at a cheap 8x earnings which are growing. The Boeing 737 Max problem would impair UAL. (Analysts’ price target is $108.47)

(A Top Pick Oct 03/18, Down 0.4%) It's trading at a big discount to its book value, at 1x tangible book value vs. not only its peers but its own history. They've done everything right, like passing the stress test. They're buying back ($15.6 billion of shares last year), and pay a good dividend yield