Last week, I wrote a piece entitled My Principles of Single Stock Investing and it got a lot of attention from the Three Action Thursday readership. I received a few emails with questions and others from folks letting me know that they didn’t agree with my (admittedly) conservative principles. That’s ok. If anything, I hope it spurred people to think about their own personal finance philosophies.
As promised, this week I want to fully disclose to you my personal single stock investment portfolio and why I purchased the stocks that I did. Remember, I plan to hold on to the majority of these stocks for a long time. I am not day trading!
Over the last couple of months, we have grappled with a global health pandemic. Despite the challenges, the United States stock market has done quite well weathering the storm. Some have even said that the stock market is disconnected from reality. Even though millions of Americans are out of work and many others are quarantining and spending less, the Dow Jones Industrial Average is only down (at the time of writing) 6.3% Year to Date for 2020. Additionally, there have been some incredible buying opportunities throughout the crisis.
To make this piece easier to digest, I am going to categorize my purchases into three categories: recovery stocks, recession-proof stocks, and undervalued stocks.
Disclaimer: I am not an investment professional; please read this piece for entertainment and knowledge purposes only. I am not responsible for any of your stock picks. I’ll take credit for any gains but disavow any of the losses. :: smiles ::
Here’s a chart of the stocks I purchased, the number of shares, and the price I paid. I invested approximately $20,000 across these nine stocks with a few hundred dollars remaining on the sidelines.
If you click the hyperlinked ticker symbols below you can see their current share prices.
I purchased these three stocks because they were walloped by the effects of the global pandemic, and assuming the pandemic subsides they have solid fundamentals to make a strong comeback during a general market recovery.
Carnival Corp (Ticker: CCL) – Admittedly this may have been my riskiest purchase in the entire portfolio. Cruise lines are extremely susceptible to illnesses. Somehow, though, whenever these occur they seem to be able to rebound a year or two later to normal sales numbers. Carnival Corp was once a $50/share company, and I think it could eventually return to that.
Southwest Airlines Co (Ticker: LUV) – Just like the cruise lines, the airlines have been decimated in recent months. Southwest Airlines has a pretty solid balance sheet and is another company that I think could recover strongly post-pandemic and surge back to its high $50/share stock price.
Simon Property Group (Ticker: SPG) – Simon Property Group is a commercial real estate company that operates a real estate investment trust (REIT) around retail properties. Retail was pounded by the pandemic: no one is/was shopping. This is another stock that I think could surge back to its stock price highs in the mid-$160s. Another SPG benefit is that they pay a healthy dividend with an above 8% yield.
In a recession, there are typically some stocks and sectors of the market that are generally unaffected. One of those is technology companies. These next two stocks represent recession-proof stocks that I have purchased over the last few months.
Tesla Co (Ticker: TSLA) – This is everyone’s favorite single stock right now. I am lucky to have bought into Tesla at (as of right now) what appears to be a great share price ($553.15). But this was not a market timing purchase on my part. Tesla, I believe, is a unique company with tons of upside; not just cars, but also in car insurance and green energy (batteries and solar roofs). I plan on holding on to these shares for a long time.
SuRo Capital Group (Ticker: SSSS) – This purchase was an interesting one strategically. SuRo is an investment capital company. They put capital (money) into companies in hopes of making a killing when those companies are sold or go public via an Initial Public Offering (IPO). SuRo owns a double-digit chunk of Palantir. I think very highly of Palantir, a privately held company that does a lot of Information Technology work for the government. It is slated to go public via an IPO in the next 12 months. So when Palantir goes public and shares rise, SuRo will benefit greatly. Since I can’t buy Palantir stock (yet), I bought SSSS instead.
This group of stocks I believe were unfairly hurt by the pandemic and general market conditions and were just good buys in general. They are stable companies with bright futures and all pay some sort of stock dividend.
JP Morgan Chase (Ticker: JPM) – This is one of the largest banks out there. It has recovered nicely since the banking/mortgage crisis in 2007-2009, and I think it has solid fundamentals to weather this storm as well. I think it could easily bounce back to its highs in the $140s, and it offers a dividend payout with just under a 4% yield.
Boeing Co (Ticker: BA) – Boeing has been hit hard by a series of issues, including challenges with its 737 Max, as well as general market conditions. Its previous market highs had it approaching $400/share. I think the company will straighten things out. (Frankly, it’s too important to our country’s infrastructure for them not to receive help if they didn’t straighten things out.) Lastly, it also has a dividend with a 4.78% yield.
3M Co (Ticker: MMM) – This is a solid company sitting squarely in the middle of its 52-week high and low. 3M has a lot of products being utilized during the pandemic, and I think the future is bright for them. They also have a modest dividend at 3.75% yield.
Walgreens (Ticker: WBA) – Another company that seems not to have been greatly affected by the global pandemic from a sales perspective, but has been unfairly hit in the stock price. People need their medications, personal care incidentals, and cosmetics (they sell a ton of cosmetics). It’s also sitting squarely in the middle of its 52-week high and low, and offers a dividend of 4.63%.
- Which of the three stock categories I used (recovery, recession-proof, undervalued) could you see yourself confidently investing in?
- Think of companies with which you like to do business or whose principles you respect/appreciate. Would you put them in one of these three categories or something else entirely? What keeps you from investing in them?
- If you want another opinion on a stock investment you’re considering, feel free to contact me. Again, I am not an investment professional but I’m happy to share my thoughts as a fellow investor in the market.**