All three Blue Harbinger strategies continue to outperform. This week’s Weekly reviews the performance of the individual holdings within each strategy, and we focus on several stocks in particular that we believe provide terrific buying opportunities right now. And just for grins, here is a fun quote from Charlie Munger.
What a Difference a Week Can Make
Strong jobs data and a rebound in oil prices fueled the S&P 500 2.6% higher last week. Our Income Equity, Disciplined Growth and Smart Beta strategies all outperformed for the week, and they all continue to outperform since inception. Also, our Tsakos options trade is now up 98% since we initiated it on Feb 8th. Next week’s biggest scheduled data release will be crude oil inventories on 3/9, and we believe the stocks in all three of our strategies are set to climb higher. Here are the holdings (and recent performance) for each strategy:
Income Equity Stocks Continue to Outperform
Since its launch in January, the Blue Harbinger Income Equity strategy continues to outperform the S&P 500. As the following chart shows, its holdings are well-diversified across market sectors. Further, the strategy’s dividend yield is well above the dividend yield of the benchmark S&P 500 index. In this week’s Weekly, we review several holdings in particular, and describe why the strategy is positioned for continued outperformance.
Where Will Yahoo! Go To Die?
Yahoo is looking to sell its core business, and the board is excluding CEO Marissa Mayer from the process. In this week’s Weekly, we consider who might actually buy Yahoo and what they’ll pay (spoiler alert: they’re not going to pay much, and they are going to cut costs to the bone). On a separate note, our new big-dividend Blue Harbinger Income Equity strategy is off to a terrific start this year, outperforming the S&P 500 by 2.2% already.
McDonald’s: Weighing the Risks Ahead
Will Oil Drag the Market Lower Again?
The market followed oil lower last week as crude inventories exceeded expectations. Important economic releases this upcoming week include crude inventories on Wednesday (2/10) and retail sales on Friday (2/12). In this week’s Weekly we review the Blue Harbinger stocks that announced earnings last week (they were better than expected) and the ones that announce this upcoming week. We also share a top contrarian idea we’ve been working on to profit from “low for longer” oil prices.
Upcoming Earnings Announcements: Plenty of Upside Ahead
In this week’s Weekly, we review the Blue Harbinger stocks that announced earnings last week (they completely knocked it out of the ball park), and we explain why we believe they’ll continue to deliver very big gains going forward. We also review the Blue Harbinger stocks that will be announcing earnings over the next two weeks, and why we believe they too will deliver terrific results. Also worth noting, this weekend Barron’s announced it is “Time to Buy Bank Stocks.” We highlight our favorite bank stock in particular.
Are You Diversified? Appropriately?
Long-term investors should not forget the risk-reward tradeoff. For example, if you were diversified into investment-grade bonds over the last year then your account balance probably hasn’t suffered as much as if you’d invested entirely in stocks. However, over the long-term, we expect stocks to significantly outperform less-risky bonds. This week’s Weekly highlights some extremely attractive stock-specific opportunities that have been created by 2016’s recent market volatility.
Attractive Dividend Yields: Healthcare REITS
This week we review how recent market declines have created some very attractive dividend yields, especially for our favorite healthcare REIT (Hint: It's one of the REITs in this table, and no, it’s not Omega!). We also provide a review of our favorite industrials stock (not a REIT!) which happens to be offering an extremely attractive dividend yield right now. Additionally, we share our view on how we expect this earnings season to impact the sharp decline in stocks we’ve experienced so far this year.
Attractive Dividend Yields: Industrial REITS
We have released some exciting updates in our members-only area this weekend. Specifically, our high dividend “Income Equity” strategy is now available to all subscribers. Also, we have renamed our ETF strategy; it’s now called “Smart Beta” because that is a more accurate description of what it really is. Additionally, we review one of our latest holdings, a high-divided REIT (Hint: it’s one of the REITs in this table, and no it’s not Stag Industrial!).
Blue Harbinger "Income Equity" Strategy
In this installment of our members-only Blue Harbinger Weekly, we review an exciting upgrade to our members-only area that is coming soon. Specifically, we discuss the soon to be released Blue Harbinger “Income Equity” strategy. This new strategy will be available to all existing Blue Harbinger subscribers. We also review one of the holdings within the new strategy that should benefit greatly from where we are in the current mortgage origination cycle.
Active vs. Passive: Fees Matter Either Way
According to data from Morningstar, the average expense ratio among passively managed index funds and exchange traded funds (ETFs) is 0.69%, and for actively managed funds it is 1.21%. And while this level of expense may seem reasonable to some, we believe it is a complete and total rip-off that can cost the average investor hundreds of thousands of dollars over the course of an investment lifetime. Blue Harbinger’s passive “Lazy Person” ETF strategy and active “Blue Harbinger 15” strategy will show you how to be a better, smarter and more profitable investor. This week’s Blue Harbinger Weekly reviews specific holdings within each of these strategies.
Year-End Rebalancing and Great Opportunities
Time to sell your winners and buy the losers? Some contrarians might think so. With 2016 right around the corner, it can be helpful to see what has and has not been working, and why. For example, Caterpillar has been a persistent loser (as we wrote about here), and Nike and McDonald’s have been big winners this year. This week we review the Dow Jones stocks we do own (and why), and our view on when it’s prudent to rebalance.
Terrific Stock-Specific Opportunities, Despite Broader Market Red Lights
With all of last week's macro-volatility, and the Fed set to begin raising rates this upcoming week, it's a great time to point out two important things: (1) Diversified long-term investors don’t need to make a single change to their investment strategy, and (2) Many terrific stock-specific investment opportunities remain for those willing to do their homework. For example, this week’s Weekly highlights several specific stocks related to cloud-based human capital management that are set to climb from an accelerating secular trend.
Market Cycles and Investor Blindness
This week’s Blue Harbinger Weekly focuses on broad market cycles, and how quickly investors forget about them and become blind to their dangers and opportunities. We consider the staggered market cycles of the US versus international economies, and the impacts on specific industries such as railroad companies and heavy machinery manufacturers.
2016 Outlook: Own Selective Small Cap and High Dividend Stocks
Ben Graham’s Margin of Safety and Current Market Opportunities
When Coca-Cola replaced their classic formula with “New Coke” in 1985 the stock tanked, and when they brought back “Coca-Cola Classic” less than three months later the stock rebounded significantly. Similarly, when McDonald’s had trouble with Chinese meat suppliers in 2014 the stock tanked, and since rebuilding customer confidence the stock has come roaring back. Chipotle Mexican Grill's (CMG) recent setbacks may be providing enough margin of safety for brave long-term investors to do something very smart.
Know Your Goals, Hold Your Ground.
Our favorite cloud-based small cap holding is up 31% in the last month, and it beat the market again this week despite the broad sell off we are experiencing. If you are a diversified long-term investor, there is no reason to change your strategy just because volatility has picked up. Buying and holding quality stocks is a proven winning strategy.