Invest and Chill – How to Be a Portfolio Player

To be a player you have to learn from a player.  And I’ve read my fair share of books about players or as I call them, Original Investors’ in the stock game.  Please don’t get confused, they are not OGs or Original Gangsters, they are more of what I would call old heads or OIs  à Original Investors.  Ron Baron, Peter Lynch, Warren Buffett, and Mario Gabelli are just a few that come to mind.  In addition, I appreciate successful business people and investors who look like me. Some of those great businesspersons include: LeBron James, Jay-Z, Sean Combs, Dr. Dre, Oprah Winfrey (Sports & Entertainment) and Robert Smith, and John Rogers Jr (Financials and Investments). I remind people some of the same skills come in handy when running a business and investing in businesses. One might say: Game Recognizes Game

But back to the lecture at hand, I want to focus on an Original Investor name Mario Gabelli. He often jokingly calls himself “Dr. Love”.  Our generation might ask is Dr. Love the king of “Netflix & chill” or “swiping right”…no not exactly, he’s a player alright just of the stock market.  So what kind of player is this?? Well he often targets companies that will be acquired by another company.  Acquired/Merged/Bought Out…are just the stock market’s way of saying these two companies plan to hook up.  Companies that hook up in the stock market are usually a good thing because the company being pursued usually requires a lot of cash or stock for this to happen. 

So one of the things I challenge myself to ask while researching stocks is whether my stocks are “dateable”.  While it is not my main strategy, it helps to have this as an additional catalyst for a stock to do well.  I try to identify trends in companies being acquired and often ask: “Why is this stock so attractive to other companies?”, “Is this an industry trend that will continue?”, and quite frankly “who might be next”.  While it sounds a really bad dating show, it is important to understand if the company is a diamond in the rough, considered young and attractive, or could the company make company’s pursuing it BETTER.  Here is my Invest and Chill Portfolio:

Possible Themes Uncovered: Healthcare (rationale: all the talk of drug costs coming done??); Media (rationale: Content is king as everyone moves to streaming and online gambling); Technology & Telecom (rationale: young and attractive companies being bought, 5G coming soon??); Value (rationale: strong market means underperformers get bought out??)

Urb Update: Full Disclosure: I’ve owned all of these stocks as noted before; many are currently in the process of being acquired. Feel free to search the site for previous posts and commentary

#investandchill

New Tech Titans, Double Dips, & Don't Label Me...

New Tech Titans

The technology field is definitely active as social networking, gaming, movies, and music continue to seamlessly weave themselves into our daily lives. It's time to refresh your memory on the new tech titans on the block.  First off, Facebook leads the charge with their recent announcement of new features: (1) group chat, (2) new designs, & (3) video chat. Many people can't wait for the day this stock IPO's or goes public.  Next is Google, who is offering Google+ a competing social network site and chomping at the bit for more targeted advertising.  And then there is the simplicity of Netflix.  Netflix is now streaming throughout many homes on a regular basis and they are betting that you will stick around even as they raise prices.  Sorry to break the news but Netflix prices are going up for everyone...will you pay up?

Other hot technology firms are Linked In, Pandora, Zynga, Square, and others which are changing the way we interact, watch movies, and listen to music. Then we have Groupon which could be potentially be valued ar roughly $20 Billion dollars when they IPO, or become a public company.  The question often asked is “Do You Remember The Technology Bubble?” and is it happening all over again. I do believe that some of these firms are legit, but I think a few won't be as popular as they are today. Stay tuned for further posts as I tackle which technology stocks will survive the digital renaissance.

Double Dip??

The economy may be suffering from a really bad hangover that was worse than we originally thought.  Financial stocks, housing stocks, and high levels of consumer debt make you wonder if we've learned anything at all from the 2008 crisis.  I just don't have the feeling that we are out of the woods yet and I've been cautious for quite awhile.  I don't think I am alone anymore as there have been rumbling about more stimulus...is there Quantitative Easing on the horizon, well the Fed might think so.  Can you say QE3