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« Our Best Predictions: A Review | Main | ETF Update: Another Look at the Banks »

October 14, 2009


options trading

Good tip! Picking stocks is really something you need to be careful about, not all stocks are created equal. Good post Jeff!


Patrick -- You raise a good question, and I'll try to take it up in more detail. Briefly put, you can be fully diversified, and merely reflect the market. Since I try to make outsize gains, I focus on themes and sectors. I do this with 12-15 holdings and another 40 stocks on a watch list.

Good question!


Market Sniper

Thanks, Jeff! Good start! Just one thing....I do not see a conspiracy around every corner; ..nor do most "cospiracy nuts"..but here is the thing 1) how are ALL organizations structured..pyramidal..2) What is at the top of every pyramid? or a few individuals..statement of fact...there are many pyramids..3) Do the tops of the pyramids talk to each other? Of COURSE they do! 4) Do the tops of the pyramids act in concert when it is to mutual benefit? Of COURSE they do! What some may consider to be conspiracy is not, UNLESS mutual pre-agreed action is hidden and/or illegal. Now, if you believe that the modern private central bankers at the Federal Reserve are NOT involved in a "conspiracy" you might want to revist your assumptions including the very nature of the "money" creation process as a start. Just a start.


I'd be interested in what kind of exposure you have with individual stocks. I used to love researching and following individual stocks. But I've come to find it a fool's errand. You'd have to own dozens, if not hundreds to overcome single issue risk. While you probably have the means to own that many, and you do this for a living so maybe have the time to follow them all, I don't. So, I keep 5% of the portfolio in a few individual stocks just for kicks.

The stocks you mention are all U.S. large stocks. Is this where you focus on individual names only ? Do you not pick stocks in the small cap or international space?

You have health care as a theme, so political risk is not something you avoid. You also like stocks analysts are down on. So, what about financials? Or does owning even one value ETF expose you enough? lol

Paul Nunes

nicely written Jeff! thanks


I wonder how an index of stocks that have not been mentioned on CNBC would perform.

Mike C

Energy stocks. When economic growth was more promising, we were near a tipping point in energy prices. There are many forces providing a bottom in these sectors, and the upside is significant.

I'd love to hear more about this theme, particularly how you bring your government/public policy background to analyzing the opportunity set here.

I own 2 natural gas stocks, Chesapeake Energy and XTO energy as I have been a long-term natural gas bull.

As I'm sure you know, we generate roughly 50% of our electricity from coal and 20% from natural gas. Natural gas burns much cleaner, but is more expensive. Many suggest natural gas as a "bridge fuel" and something to use for transportation instead of gasoline as we import roughly 70% of our oil, but we are essentially self-sufficient in natural gas.

All that said, it is clear there is a political battle being fought especially in terms of the coal lobby versus the natural gas lobby in this proposed cap and trade legislation.

Your knowledge of the political dimension here is obviously vastly superior to mine, so any thoughts you can share would be appreciated.

Mike C

Excellent post! Thank you.

I hope in future articles you will flesh out and write more about themes you see that are opportunities regardless of the market.

There is that old expression, it is a "market of stocks" not a "stock market" and despite the S&P 500 having not gone anywhere for a decade, there are many, many individual stocks with substantial cumulative positive performance over the past 10 years.

I'd be particularly interested in how you think about AAPL in terms of likely revenue growth, margin expansion, etc.

Enjoy the birthday celebrations!

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