5 Stock Buys Today
“Widespread fear is your friend as an investor because it serves up bargain purchases"
- Warren Buffett
The Portfolio
The portfolio is up around +5.00% YTD.
Our benchmark index, the S&P 500 is down over -8.00% YTD.
If you're interested in the stock market, are looking for diversification or growth please feel free to connect me. I'm always available to talk, maybe provide some new ideas or to present to your group. clay@claybaker.com
What I'm doing today
Today I sold 10 shares of our gold fund (GLD) to raise a little cash, and reallocated that cash.
I bought more shares of Facebook (FB), Avalara (AVLR), Boeing (BA), Chipotle Mexican Grill (CMG) and started a new position in Twillio (TWLO).
While the market is exhibiting extreme volatility, I'm staying true to our investing discipline and the companies in our portfolio by adding on significant declines. Can these stock prices decline further, yes and I suspect they will; but I have no way to know for sure. Since I liked these companies at higher prices, I have to like them more at lower prices.
Sold 10 GLD @ $158
Bought 5 AVLR @ $75
Bought 2 BA @ $250
Bought 1 CMG @ $686
Bought 2 FB @ $178
Bought 5 TWLO @ $99.75
What's Happening?
Markets are continuing to be volatility as investors try to process all the information coming at them with respect to coronavirus, oil prices declining, the fed cutting interest rates, the change in the democratic candidate field, and the VIX or the fear gauge reaching pretty extreme heights. It's also Friday and few investors want to go into a weekend without taking something off the table when markets are volatile. That's not my approach. I don't care what other investors are doing for the weekend, I'm lazer focused on our portfolio and each specific company. In the last hour of the trade today the market has bounced back which is giving investors a bit of a head fake.
What Should You Be Doing?
In general I think all investors should be looking to reduce highly speculative stocks and increase their investments in high quality companies that have declined by 15%-20%. The market is now full of great companies that have declined by up to 20%. I'm not recommending any specific companies, but I'll point out a few names to give you the gist of what I mean by quality:
Another holding I always like to keep in the portfolio is gold in the form of the GLD. From low to high year-to-date the GLD gained 30%. When the dollar declines, gold goes up. When fear increases in the market, gold goes up. While gold produces nothing and has very little industrial value, gold is a stabilizer for all uncertainty within a stock portfolio. The GLD is a fund that hold physical gold and has the best liquidity of any gold fund available. I feel that 10% of a portfolio is a normal holding and increasing that to as much as 20% in uncertain times is reasonable. I've pegged the Stay Invested portfolio at 15%. We're currently below that level and need to do some allocation work, reducing stocks and building up our index funds and gold.
"Markets don't go to zero, Portfolio's do.
Buy quality, be patient...and look twice for motorcycles."
- Clay Baker
Stay Invested,
Clay Baker
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Keep Me Honest 2019
S&P 500 declines to 2,350 or more (1-3-2019)
Healthcare and Biotech sectors outperform (1-3-2019)
S&P reaches 3,000 by year end (1-11-2019)
CSCO reaches $60/share (1-18-2019)
VEEV reaches $145/share (2-14-2019) (achieved $145.23 on 5-10-2019)
CVS reaches $91.50 (2-27-2019)
Bull market takes another leg up (4-7-2019)
The Fed will lower rates 1-2 times (5-13-2019)
Clay's Rules
Rule #1: Don't lose money
Rule #3: Portfolios go to zero, markets don't, Stay Invested
Rule #4: When a good stock you own drops 10% below your cost basis, add shares
Rule #5: Bull markets aren't sustained without the Transports
Rule #6: When Forward P/E is lower than TTM P/E, expect earnings to increase
Rule #7: When an investment bank sells below book value, buy it
Rule #8: Tips are for waiters. Do your own homework.
Rule #9: Don't sell a stock because you're bored with it. Do your own homework.
Disclosure: I am personally invested long in some or all of these stocks or funds that appear in the Stay Invested portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the Stay Invested portfolio but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. I am invested long in these securities mentioned in this post:
HD, AMRN, BSTC, CVS, CSCO, VEEV, STZ, AMZN, NVDA, BCRX, GS, BDSI, VEEV, VTI, GLD, HD, AWR, XLNX, MRVL, NBRV, ENPH
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.
