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COMMENT
Profits are what matters. Exactly. There's always something happening in the world: the Fed, Afghanistan, the Delta variant. Ultimately, if a business increases its earnings and cashflow, it's going to be worth more. If you distill it to that level, eliminates the noise that can throw you off track. Buy good companies that have a better advantage against their own history, their peer group, and the market in general, and you'll do well over time.
Unknown
COMMENT
Is the rebound artificial? In March 2020, he wrote about the 3 types of recession: event-driven, cyclical, or structural. The pandemic was event-driven. It was deep and sharp, and we came out of it quickly. In the end, make sure you're paying a fair price for what you're getting. If you compare to the end of 2019, the market is up about 30%, and corporate profits are up about 22%. Modest multiple expansion, but not wild. Now in 2021, we have more of the telltale signs of an early cycle environment than in 2019. Companies are restocking, inventory expansion, consumer never in better shape, rate of saving is high, corporate profits are booming, corporate margins are the highest ever at just over 13%, low interest rates. A lot of good things happening. A correction can happen any time, but long-term investors are in a good spot here.
Unknown
DON'T BUY
Focus is on retail and pharmacy. Good side of the business, but slow growing. He's gone with CVS. More vertically integrated, growing dynamically. CVS has health insurance with Aetna, pharmacy benefit manager with CareMark, and HealthHub offering in-store diagnostics.
specialty stores
BUY
Vertically integrated, growing dynamically. CVS has health insurance with Aetna, pharmacy benefit manager with CareMark, and HealthHub offering in-store diagnostics. Better choice than WBA.
specialty stores
BUY
Entry-level homebuilder. The industry has lots of moving parts and negative news. Don't let this sway you. We're still in the nascent part of the cycle. There's a home supply problem. EPS could touch $4 in the next two years.
0
DON'T BUY
Likes what they've done. Stock's been volatile. On valuation, it's found its level. Usually trades at a discount to the market. Growth metrics aren't fantastic at 5% a year based on cashflow and earnings. Not terrible, but nothing to write home about. Better opportunities out there. See one of his Top Picks today.
INDUSTRIAL PRODUCTS
BUY
A well-positioned investment in the deep commodity space. A cyclical investment, as well as a secular change. Produces copper, 70% is used in electrification such as alternative sources of energy or cars. Strong case for long-term increase in demand for copper. Excellent investment here.
non-base metal mining