Industries you lay money bets

[shootingstar]

Areas covered my portfolio:

• No energy nor gas companies...  at least not directly.  A few last yr. have been removed from Canadian stock exchange index, TSX.  (Though am living in middle of Canada's heartland for this industry...it's falling all over place last few years.  Doubt VERY much it will get back to boom.)
• 1 U.S. EFTF S & P index fund
• Canadian major rail company (well, they bought out a chunk of U.S. strategic rail line several yrs. ago)
• tech firm (e-commerce platform)
• 2 banks
• Tech firm in security, flight simulation software, health care
•  2 firms for: Alternate/renewable energy 3rd-party firm - abit of coal , wind, solar, hydro-electric firms 
• Fertilizer/agrochemicals
• Solar panel systems manufacturer, solar asset/project management & maintenance
•  Mining firm
•  1 Canadian ETF (bonds. I might get rid of this hamster.)
•  1 ETF (dividend income)

Except for the US ETF fund occupies an tiny portion, all firms are Canadian with global operations/subsidiaries and staff.

Clearly this is not the lottery. I feel like dilettante...dabbler.  Maybe playing with too many fires.  Will be kicking out some dogs (sorry for the dog-lovers here). And no cannabis, cryptocurrency. Some owners leaving cannabis firms after making their money and latter type is not regulated at all. For latter, there is already an investigation by Canadian securities regulatory authority for a firm. (Do not tell me differently:  A brother-in-law was a securities lawyer with one of the Canadian regulatory authorities.)

[donkpow]

Communication

[shootingstar]

17 minutes ago, donkpow said:

Communication

I haven't chosen telecommunications.  I probably know abit of backstory on their ways to levy fees and dog's breakfast of agreements with different Canadian municipalities. It is a cut throat business..investment of infrastructure installs which change every decade due to changing technologies or so, vs. profit.

[Wilbur ★]

I have securities in one mining company..  Other than that, real estate. 

[shootingstar]

1 hour ago, Wilbur said:

I have securities in one mining company..  Other than that, real estate. 

Haven't even gotten a REIT fund at all. It's abit mysterious to me. Closest for a conservative player like me, is a third party infrastructure asset management firm...that's global.  Probably too late for that now...at this time in life.

Obviously you're comfy with real estate.

I did try global heavy construction equipment firm...it was ok.   But it is a cyclical biz world-wide.

[MickinMD ★]

I'm also staying away from energy companies - at least big oil, because I see autos moving toward electrics and electric utilities moving from fossil fuels and general efficiency increasing. I sold Exxon in Dec. 2014 (it had been buying back $2 to $3 billion of stock per QUARTER to prop-up its stock price) and in Feb. 2015 it was revealed that Warren Buffett had also sold it in Q4 2014. I sold Conoco Phillips and Phillips in 2016.

I'm also out of electric utilities because Global Warming, solar panels, etc. are reducing their growth. I owned one of the best ones, Southern Company (SO), until 2014.  The dividend was fine, but I didn't trust earnings to grow.

I only sell 0-3 of my 12 stocks each year - when I consider their fundamentals have changed or I uncover an exciting new candidate.

Despite being highly knowledgeable about technology, I am not on top of things in a rapidly changing tech competition scene, so the one non-retirement fund I have is T. Rowe Price's Communications and Technology Fund, about 9% of my portfolio. It's impressive 20 year plus record gives me relatively safe exposure to Amazon, Baidu, Alphabet, Facebook, etc. and I may grow it to 13%-15% of my portfolio.  I also own Emerson Electric, but it's mostly applied hi-tech: it mostly builds control equipment for salt water oil rigs, elevators, etc.

I've been tempted to buy a leading retailer like Walmart that's likely to challenge Amazon online in the next several years.  Currently I own Costco.

I sold Wells Fargo and bought J.P. Morgan last year after I was tired of one scandal after another. There's been a recent article that says banks under-perform in the long run, but if that's so why has Wells Fargo been one of Warren Buffett's biggest holdings for decades and he has held on to other banks even though his profit from bailing them out after 2008 has been realized?

My individual stock portfolio is heavy with healthcare-related companies that represent roughly 33% of my portfolio: Abbott Labs (owned since 1993 and tops or close to it in nutritionals, hospital equipment, generics, and quick-test kits)  and Abbvie (split from Abbott Labs in 2013, major pharmaceutical manufacturer, and CVS (largest US drugstore and Pharmacy Benefits Manager for Insurers and owns Aetna Insurance).

The rest of my portfolio is a diverse group of value stocks that are among the leaders in their sector and most have long records of steady growth.  Here's the whole thing (I don't keep more than 12 securities because I wouldn't have time to keep an eye on them):

I automatically add a small amount each month to what I consider the "stalwarts" of my portfolio: ABBV, ABT, GIS, EMR, and PRMTX.  ABT and ABBV have raised their dividends for 48 straight years. GIS has raised its dividend 13 of the last 15 years and has not lowered its dividend since the 1800's - yes EIGHTEEN hundreds. EMR has raised its dividend every year for 62 consecutive years.  PRMTX has outperformed the S&P 500 for 1, 3, 5, and 10 years and has smashed it 15% to 10% annually since inception in 1993.  I expect ABBV and ABT and PRMTX to remain 1.3-2x as much as my other stocks and try to keep the other ones "balanced" by making monthly contributions to my smaller holding (GIS and EMR right now).

My portfolio:

Abbott Labs (ABT, 13.7% of porfolio)

AbbVie (ABBV, 13.4%)

CVS (CVS, 7.3%)

Cracker Barrel Old Country Store (CBRL, 7.5%)

Southwest Airlines (LUV, 6.8%)

J.P. Morgan Chase Bank (JPM, 7.4%)

AT&T (T, 8.3%)

Costco (COST, 8.3%

General Mills (GIS, 5.3%)

Emerson Electric (EMR, 5.9%)

Home Depot (HD, 6.7%)

T. Rowe Price Communications and Technology Fund (PRMTX, 9.2%)

[shootingstar]

19 minutes ago, MickinMD said:

I'm also staying away from energy companies - at least big oil, because I see autos moving toward electrics and electric utilities moving from fossil fuels and general efficiency increasing. I sold Exxon in Dec. 2014 (it had been buying back $2 to $3 billion of stock per QUARTER to prop-up its stock price) and in Feb. 2015 it was revealed that Warren Buffett had also sold it in Q4 2014. I sold Conoco Phillips and Phillips in 2016.

I'm also out of electric utilities because Global Warming, solar panels, etc. are reducing their growth. I owned one of the best ones, Southern Company (SO), until 2014.  The dividend was fine, but I didn't trust earnings to grow.

I only sell 0-3 of my 12 stocks each year - when I consider their fundamentals have changed or I uncover an exciting new candidate.

Despite being highly knowledgeable about technology, I am not on top of things in a rapidly changing tech competition scene, so the one non-retirement fund I have is T. Rowe Price's Communications and Technology Fund, about 9% of my portfolio. It's impressive 20 year plus record gives me relatively safe exposure to Amazon, Baidu, Alphabet, Facebook, etc. and I may grow it to 13%-15% of my portfolio.  I also own Emerson Electric, but it's mostly applied hi-tech: it mostly builds control equipment for salt water oil rigs, elevators, etc.

I've been tempted to buy a leading retailer like Walmart that's likely to challenge Amazon online in the next several years.  Currently I own Costco.

I sold Wells Fargo and bought J.P. Morgan last year after I was tired of one scandal after another. There's been a recent article that says banks under-perform in the long run, but if that's so why has Wells Fargo been one of Warren Buffett's biggest holdings for decades and he has held on to other banks even though his profit from bailing them out after 2008 has been realized?

My individual stock portfolio is heavy with healthcare-related companies that represent roughly 33% of my portfolio: Abbott Labs (owned since 1993 and tops or close to it in nutritionals, hospital equipment, generics, and quick-test kits)  and Abbvie (split from Abbott Labs in 2013, major pharmaceutical manufacturer, and CVS (largest US drugstore and Pharmacy Benefits Manager for Insurers and owns Aetna Insurance).

The rest of my portfolio is a diverse group of value stocks that are among the leaders in their sector and most have long records of steady growth.  Here's the whole thing (I don't keep more than 12 securities because I wouldn't have time to keep an eye on them):

I automatically add a small amount each month to what I consider the "stalwarts" of my portfolio: ABBV, ABT, GIS, EMR, and PRMTX.  ABT and ABBV have raised their dividends for 48 straight years. GIS has raised its dividend 13 of the last 15 years and has not lowered its dividend since the 1800's - yes EIGHTEEN hundreds. EMR has raised its dividend every year for 62 consecutive years.  PRMTX has outperformed the S&P 500 for 1, 3, 5, and 10 years and has smashed it 15% to 10% annually since inception in 1993.  I expect ABBV and ABT and PRMTX to remain 1.3-2x as much as my other stocks and try to keep the other ones "balanced" by making monthly contributions to my smaller holding (GIS and EMR right now).

My portfolio:

Abbott Labs (ABT, 13.7% of porfolio)

AbbVie (ABBV, 13.4%)

CVS (CVS, 7.3%)

Cracker Barrel Old Country Store (CBRL, 7.5%)

Southwest Airlines (LUV, 6.8%)

J.P. Morgan Chase Bank (JPM, 7.4%)

AT&T (T, 8.3%)

Costco (COST, 8.3%

General Mills (GIS, 5.3%)

Emerson Electric (EMR, 5.9%)

Home Depot (HD, 6.7%)

T. Rowe Price Communications and Technology Fund (PRMTX, 9.2%)

Mick, you don't have to name companies....but anyway.     It actually sickened me when I personally heard stories from locals what some very high bonuses to some mid-level ranking professionals in those oil and gas firms.  

From Jan. 2020 magazine article: https://albertaviews.ca/just-transition/  See excerpt below.

I live in a city where 35,000 people were laid off from oil and gas industry in the past 3 years.  The housing value has dropped noticeably in the last 12 months. It's really obvious now. I see my property assessment value notice this year.   OUr city is 1.2 million people.  It is the biggest city in Alberta.  the other 2nd biggest is Edmonton, capital city of Alberta.  We are a very rural province compared...to Ontario.

I appreciate we need petroleum to make plastics, bike tires, etc.  But from an investment standpoint, I can't personally do it.  I just buy the end products (which are probably made in China, Vietnam, etc.).

 

 

 

[Page Turner]

...way back 20-25 years ago when my wife started investing in equities, she did this same thing, trying to pick winners.  After a lot of experiences, (both good and bad,) it turns out that low fee index funds that track overall market performance (like Vanguard) are simpler to manage and require a lot less attention for buy and hold people like us. Anyway, they (Vanguard) have funds that are structured around market sectors as well, and bond funds so you can balance a little of the risk from interest fluctuations.

As you get older, if you're no longer interested in getting rich, funds like those from a large entity like Vanguard make it easier to reallocate to cash as well.

 

You can find funds that are "socially responsible"  (Calvert is one), but they generally perform poorly in comparison to those that track the overall market.

 

[MickinMD ★]

I have a cousin whose husband, Donnie, died in his 40's in the 1980's.  He put her in various securities - mostly in DRIP plans which, with a small-town fireman's pension, has left her with a comfortable life ever since - she's in her 80's now.

Every once in a while, she asks me about her stocks when she gets a confusing letter from the DRIP Administrator.  I check out the company and EVERY time, it turns out to be a very stable company that pays lots of dividends - she occasionally collects them or has them reinvested, depending on her or her daughter's family's needs.  Donnie was one of the most likeable, kind people I ever knew and he had a side business as an electrician as well as full-time fireman - and was frugal and saved, saved, saved - he inherited his parents' house. I wish I had asked him how he knew so much about stocks!

The last one she asked me about has the ticker symbol "ET" and is called "Energy Transfer LP" - one of those energy pipeline companies. It pays a 9.15% dividend which represents a 100% payout ratio (all the company profit is being paid out in dividends) and it has averaged a 7.06% dividend for the past 5 years - it has paid something like that for decades.  Of the 20 major analysts surveyed by Yahoo, 10 call it a Strong Buy, 8 call it a Buy, and 2 call it a hold.

Earnings in the past year are up 17.4%, major analyst projections avg. 16.5% per year for the next 5 years!  The stock price fell from around $10 to $4 during the 2008-9 crash, bounced up to $11.50 by 2011 and it's $13.27 now.  There have been brief periods where it irrationally soared to as much as $34.33, but ignoring the anomalies, overall it's shown slow, steady growth for decades.

CFRA (formerly S&P Quality IQ Reports) rated it a BUY and wrote "The company sees adjusted EBITDA of about $10.6 billion to $10.8 billion in 2019, which is well above projected capital spending levels of $5.0 billion."

The companie has above average debt but is VERY stable.

When my cousin asked me to evaluate ET in March, I kept running across articles like: 1 High-Yield Stock You Won’t Want to Miss
https://finance.yahoo.com/news/energy-transfer-1-high-yield-203200670.html

I told her that Donnie had done a better job in the 1980's picking stocks for 2019 than I did in 2019.

This is over 30 years after Donnie died and ALL of the several dividend stocks he picked for his wife - in case he died - are still behaving like ET!

[shootingstar]

6 hours ago, MickinMD said:

I have a cousin whose husband, Donnie, died in his 40's in the 1980's.  He put her in various securities - mostly in DRIP plans which, with a small-town fireman's pension, has left her with a comfortable life ever since - she's in her 80's now.

Every once in a while, she asks me about her stocks when she gets a confusing letter from the DRIP Administrator.  I check out the company and EVERY time, it turns out to be a very stable company that pays lots of dividends - she occasionally collects them or has them reinvested, depending on her or her daughter's family's needs.  Donnie was one of the most likeable, kind people I ever knew and he had a side business as an electrician as well as full-time fireman - and was frugal and saved, saved, saved - he inherited his parents' house. I wish I had asked him how he knew so much about stocks!

The last one she asked me about has the ticker symbol "ET" and is called "Energy Transfer LP" - one of those energy pipeline companies. It pays a 9.15% dividend which represents a 100% payout ratio (all the company profit is being paid out in dividends) and it has averaged a 7.06% dividend for the past 5 years - it has paid something like that for decades.  Of the 20 major analysts surveyed by Yahoo, 10 call it a Strong Buy, 8 call it a Buy, and 2 call it a hold.

Earnings in the past year are up 17.4%, major analyst projections avg. 16.5% per year for the next 5 years!  The stock price fell from around $10 to $4 during the 2008-9 crash, bounced up to $11.50 by 2011 and it's $13.27 now.  There have been brief periods where it irrationally soared to as much as $34.33, but ignoring the anomalies, overall it's shown slow, steady growth for decades.

CFRA (formerly S&P Quality IQ Reports) rated it a BUY and wrote "The company sees adjusted EBITDA of about $10.6 billion to $10.8 billion in 2019, which is well above projected capital spending levels of $5.0 billion."

The companie has above average debt but is VERY stable.

When my cousin asked me to evaluate ET in March, I kept running across articles like: 1 High-Yield Stock You Won’t Want to Miss
https://finance.yahoo.com/news/energy-transfer-1-high-yield-203200670.html

I told her that Donnie had done a better job in the 1980's picking stocks for 2019 than I did in 2019.

This is over 30 years after Donnie died and ALL of the several dividend stocks he picked for his wife - in case he died - are still behaving like ET!

Lucky woman for those dividend stocks.  I've never heard of such high-paying dividends for so long.

"The companies has above average debt but is VERY stable."    Really...? 

I do have a stock that is doing better than...Apple.  It's abit nerve-wracking. It might shock some Americans but there have been excellent Canadian firms if one understands the firms...but everyone in the world, thinks we're backwater. That's ok.  Let them. 

Meanwhile Silicon North continues to charge ahead in southern Ontario. 

[Dirtyhip]

I've got some FANG.  Otherwise, I tend to stick to mutual funds.  Big fan of VTSAX and  VTMFX here.  

[Razors Edge ★]

14 hours ago, shootingstar said:

I might get rid of this hamster.

I like hamsters. They don't live long, but they are quite funny little characters!

[donkpow]

I've got some Canadian stock. And Australian, and English. I had some from one of those little countries in Europe, I can't remember which one. Canadians charge me income tax on dividends (US income tax deductible). I think one of the Australian stocks is actually an ADR with fees attached.

[shootingstar]

13 hours ago, Dirtyhip said:

I've got some FANG.  Otherwise, I tend to stick to mutual funds.  Big fan of VTSAX and  VTMFX here.  

It's too late (or just too much work for me to figure out) a Canadian FANG-like set.  Only have 1 Canadian sitting in same league as 1 of the U.S. "A".  Of course, I don't even bother checking the FANG --too expensive right now.

7 hours ago, donkpow said:

I've got some Canadian stock. And Australian, and English. I had some from one of those little countries in Europe, I can't remember which one. Canadians charge me income tax on dividends (US income tax deductible). I think one of the Australian stocks is actually an ADR with fees attached.

Well, opposite is buying U.S.....now have to figure out ..withholding tax or whatever for this pure foreign share...which issued by a Canadian firm.  They chose not to list on Canadian stock exchange.   Maybe they want their stock easier for investors, to buy and sell in 1 currency that's more than ours.  Or they want to save money, by not having the IPO on a 2nd national stock exchange.

[Bikeguy]

One category that hasn’t been mentioned.  cannabis

My daughter has made a LOT of money investing in various stocks related to the emerging cannabis industry.

Illinois (as several other states have done) has recently approved the sale of cannabis products for recreational use.   My wife asked me a while ago why would they do this??   I told her, it’s all about the money.

Me… I stay with mutual funds.

[shootingstar]

35 minutes ago, Bikeguy said:

One category that hasn’t been mentioned.  cannabis

My daughter has made a LOT of money investing in various stocks related to the emerging cannabis industry.

Illinois (as several other states have done) has recently approved the sale of cannabis products for recreational use.   My wife asked me a while ago why would they do this??   I told her, it’s all about the money.

Me… I stay with mutual funds.

I did mention cannabis.  

Glad I didn't bite. Some of those firms are going through gyrations.  

[Bikeguy]

30 minutes ago, shootingstar said:

I did mention cannabis.  

Glad I didn't bite. Some of those firms are going through gyrations.  

Oops.. my bad.   One of my bad reading habits is quitting too soon.  I guess that is related to my years at work getting way too many lengthy emails. 

I stayed away from cannabis stocks because the rules seem to change a lot.  And overnight one company can fail. Or the stock can skyrocket for a while. Too risky for me. 

And as you just noticed sometimes, I don’t pay close attention.   So mutual funds were my friend.

[donkpow]

9 hours ago, shootingstar said:

Well, opposite is buying U.S.....now have to figure out ..withholding tax or whatever for this pure foreign share...which issued by a Canadian firm.  They chose not to list on Canadian stock exchange.   Maybe they want their stock easier for investors, to buy and sell in 1 currency that's more than ours.  Or they want to save money, by not having the IPO on a 2nd national stock exchange.

There are several ways to list on US exchanges. My Canadian stocks are common stocks listed on the NYSE. I assume they want the money and shareholders of the US. Buying listed stocks of foreign corporations ensures that the shareholder is protected from foreign issues because the listings have to comply with US regulations.

[shootingstar]

16 minutes ago, donkpow said:

There are several ways to list on US exchanges. My Canadian stocks are common stocks listed on the NYSE. I assume they want the money and shareholders of the US. Buying listed stocks of foreign corporations ensures that the shareholder is protected from foreign issues because the listings have to comply with US regulations.

Canada shares similar securities regulations to list on Canadian stock exchange. It's very real for the whole process to go IPO.  I worked as a tax librarian at their national Canadian office, for 1 of the global accounting firms.   A major government authority that reviews firms that want to list on the TSX is the Ontario Securities Commission.  A brother-in-law was 1 of the lawyers there for a number of years.  They also review firms for misconduct re filings, etc.

That said the securities regulations in Canada and U.S., doesn't completely prevent corruption within a firm but for sure, does force a firm to be abit more transparent in their accounting practices and how they deal with each tax authority.

1 of the Canadian firms which I bought only listed on the NASDAQ.  A few years ago, they tried to go private but their Canadian board of directors voted it down.  

 

[Mr. Silly]

On 1/12/2020 at 11:55 PM, Page Turner said:

After a lot of experiences, (both good and bad,) it turns out that low fee index funds that track overall market performance (like Vanguard) are simpler to manage and require a lot less attention for buy and hold people like us. Anyway, they (Vanguard) have funds that are structured around market sectors as well, and bond funds so you can balance a little of the risk from interest fluctuations.

That is kinda the direction I went.  Most of my money is in an S&P 500 Index Fund with the remainder split between a Long Bond fund (for security) and Microsoft (because no one ever went broke buying MSFT).  

[Mr. Silly]

9 hours ago, Bikeguy said:

One category that hasn’t been mentioned.  cannabis

There is a lot of potential growth in the short term with recreational marijuana but ultimately isn't it just another agricultural product with low barriers to entry?  In my opinion, once the supply and demand curves stabilize, the margins will be similar to other crops... kinda thin.