hahahah stop trying to sound like a smart ass. Its fucking retarded to look at a month of performance. Long term or day trading, none of this month bull shit.
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But to everyone else, my good good friend who has a constant return of 30% (I swear to god) posted this in april so its a little out of date, but still kinda relevant -
1. Silver
I'd write an analysis why, but this Seeking Alpha article does a better job explaining it than I ever could. Silver is SUBSTANTIALLY undervalued, especially relative to current gold prices, and as we experience greater inflation over the years, precious metals like silver stand to greatly benefit. I know that this isn't really a, "stock," but given that silver should be at least $110 accounting for CPI, I feel warranted in giving it my official stamp of approval.
http://seekingalpha.com/article/1086651-silver-is-set-to-explode-in-2013
I know that most of you only want to invest in things that are earning you at least a 10% annual return, but maybe this will convince you that silver has the potential to earn that for you.
http://www.cnbc.com/id/42551209
CPI has been changed so many times that I really no longer trust it as an accurate measure of inflation anyways. If inflation really is as high as CNBC claims that it is, there may come a day where we have to turn back to precious metals as the standard for exchange because nobody wants to deal with an ever-inflating money supply. Haha, but that's a different post for a different day :P
2. Stratasys (SSYS)
This is a re-recommendation of one of my picks last year. If you had invested in it the day after I wrote this recommendation, you would have earned a 52.6% return in less than a year's time. To see what they do, take a look at my original post.
https://www.facebook.com/notes/miguel-don-melgar/the-next-trillion-dollar-industry/10150657201587132
In the last 6 months, the business' net worth has jumped over 700%.
http://ycharts.com/companies/SSYS/chart#series=type%3Acompany%2Cid%3ASSYS%2Ccalc%3Ashareholders_equity&format=indexed&recessions=false&zoom=1&startDate=&endDate=
The actual business has not historically been growing as fast as some of my other recommendations, but it has still been growing at a rate faster than the market has, and it has some GREAT intellectual property which will give it some awesome potential over the long-term; specifically in the field of 4-D printing. What's 4-D printing you ask? They are objects that build themselves. Check it out:
http://www.guardian.co.uk/artanddesign/architecture-design-blog/2013/apr/10/4d-printing-cancer-nano-robots
Stratasys has not grown as quickly as its rival 3D systems, but they have the potential to print with a lot more composites, and because they develop printers for large-scale manufacturing clients like GE, they stand to benefit the most from the changes 3D printing will make for the manufacturing industry. This pick is a lot more long-term than 3D systems, but I feel that it will pay off. They aren't at too big of a discount for their current growth rates, currently trading at a P/B ratio of 1.9, but 3D printing is the future and Wall Street seems to agree!
3. 3D Systems (DDD)
3D systems has grown their net worth at a rate of over 70% for the past 5 years in a row. They are still trading at about a 15 percent discount, and they have developed a great economic moat. They make close to 80% of their revenue from selling printing materials for their printers, and their printers are ONLY compatible with their own "cartridges." They build their company around a razor and blades model, and it has definitely worked to increase their business' net worth! If you like companies with revolutionary technologies, that are growing more than 7x as fast as the general market, that are also good at protecting their profits from competitors, then 3D systems is the business for you B)
http://ycharts.com/companies/DDD/chart#series=type%3Acompany%2Cid%3ADDD%2Ccalc%3Ashareholders_equity&format=indexed&recessions=false&zoom=5&startDate=&endDate=
4. Apple (AAPL)
Now, Apple has gotten a lot of hate from investors recently. They point to the death of Steve Jobs, declining earnings reports, and the lack of "innovation" in the company as indicators of a declining business. However, I'd like to address a few of these misconceptions here:
1. Steve Jobs wasn't too involved in the company for a while before he died. He was a great innovator and CEO, but it takes a lot more than 1 man to run a business. 2. Earnings reports don't tell me anything without looking at their debt structure at the same time. When we also factor in debt, we can recognize that Apple has not declined in net worth in a single quarter for more than a decade. You read that correctly. In every single 3-month period since before 2003, Apple has gone up in intrinsic value. But you'd never know that by looking at earnings reports which also fail to look at a company's debt structure. The business has had an average growth rate of about 110% annually for the last 5 years. That is 11x faster than the general market. 3. Apple produced the iPod in 2001, the iTouch AND the iPhone in 2007, and the iPad in 2010. It's been 3 years since Apple has created a real blockbuster, and Wall Street acts like it's the end of the road for this business. Not the case at all.
http://ycharts.com/companies/AAPL/chart#series=type%3Acompany%2Cid%3AAAPL%2Ccalc%3Ashareholders_equity%2C%2Cid%3AAAPL%2Ctype%3Acompany%2Ccalc%3Aprice_to_book_value%2C%2Cid%3AAAPL%2Ctype%3Acompany%2Ccalc%3Aprice&format=real&recessions=false&zoom=5&startDate=&endDate=
This chart not only demonstrates the growth of Apple's business, but shows us that Apple shares are cheaper than they have been in the past 5 years at least. But Apple still has more products in its pipeline that prove their future prospects are bright indeed.
Apple is releasing the iTV this year with some pretty awesome functions.
http://money.msn.com/now/post.aspx?post=ae81584e-26c2-47c0-848a-c664e08850b9
This TV has the potential to completely wipe out the cable industry, as more and more people move away from cable subscriptions and start to pay for individual content that they deem worthy of watching. Instead of paying $50 a month for a bunch of channels that you never watch, it will be more like $5 a month for each of the 3 or 4 channels you actually watch on TV anyways.
Apple also has the iWatch coming this year.
http://www.forbes.com/sites/greatspeculations/2013/03/27/apple-iwatch-or-google-glass-finally-taking-wearable-computing-mainstream/
Apple also currently pays a 2.4% dividend yield in a market where over 75% of businesses don't pay any dividends at all. What are dividends you ask? Dividends are CASH CHECKS that businesses send you. You own part of the business, so the business gives you a part of the earnings. Since 1900, dividends have been responsible for 48% of the market's total return. They play almost an EQUAL part in making you money as share prices going up. Investors who don't bother to pay attention to dividends are doomed to underperform the market. If your goal is to earn at least the market average of 10%, Apple's current dividend yield gives you 24% of your expected return right there.
I'd also argue that according to it's current growth rates, the business is trading at a 25% discount at least. It can justify a p/b ratio of at least 4 no problem.
So all in all: They are trading for at least a 25% discount, pay a 2.4% dividend yield, and have grown more than 11x faster than the market average over the last 5 years, without ever going down in value in any quarter for more than 10 years. Income investors, value investors, and growth investors should all be more than happy to add this to their portfolios. If this isn't a textbook core holding, then I don't know WHAT is.
5. Baidu (BIDU)
Baidu is like the Google of China. I'd go into all of the things that Baidu does, but we have Wikipedia for that :3
http://en.wikipedia.org/wiki/Baidu
They are very, very monopolistic. They own over 70% of the total market share for search engines in China. If I'm not mistaken, their closest competitor doesn't even have 10%. They were sued in US courts for having a monopolistic structure, but the court ruled in THEIR favor and accused them of no wrong-doing. They make the majority of their revenue from charging businesses for targeted advertising, just like Google. How has this effected their bottom line?
http://ycharts.com/companies/BIDU/chart#series=type%3Acompany%2Cid%3ABIDU%2Ccalc%3Ashareholders_equity%2C%2Cid%3ABIDU%2Ctype%3Acompany%2Ccalc%3Aprice%2C%2Cid%3ABIDU%2Ctype%3Acompany%2Ccalc%3Aprice_to_book_value&format=indexed&recessions=false&zoom=5&startDate=&endDate=
They are making FAST CASH, averaging over 200% growth rates annually over the past 5 years! Their current valuation is ALSO the cheapest that it's been trading in the past 5 years, and based on their current growth rates, I'd say that right now, they are worth at least $250 a share. If they grow another 200% this year, that number will be over $750 by this time next year. That's amazing for a company that is trading at $90 a share. They are growing at a rate of over 20x the market average, and are currently at about a 66% discount for where they should really be trading. From my screens, I haven't been able to find a business that's been growing that fast that is also trading at that big of a discount, so I'd consider them right now to be the MOST PROFITABLE INVESTMENT currently on the stock market today.
The past performances of businesses do not guarantee future results. Just because a business has been growing in the past, does not mean that they will necessarily continue these trends in the future. BUT, profitability trends are a LOT more reliable than the popularity trends that the squiggle-scientists currently look for on Wall-Street, and by looking at historical data for at least 5 years, it tells us that there has been a fair amount of reliability for us to have confidence in these picks.
I sincerely believe that all of these picks are legitimately positioned to outperform the market within the next year, but I would recommend you being comfortable holding onto these stocks for a minimum of 5 years before you even think about purchasing them. Boom and bust cycles tend to take about 6-11 years to complete, so you must be willing to give the market the time it needs to make the necessary market corrections so that the stock prices can catch up with the value of these businesses. Price is what you pay, and value is what you get.
I look for businesses that are growing at the fastest rates, that are trading at the cheapest discounts. My belief is that when you invest in companies that meet these criteria, you put your money behind the companies that are the most due for an upcoming market correction.
Wall Street tries to put their money behind companies that are popular by looking for the charts that demonstrate the most momentum in increasing prices. But the problem with that is you are already too late. If you throw your money into a popular stock, you are jumping on that bandwagon mid-correction and lose out on all of the increases that occurred before you bought the business in the first place. But by looking for businesses that are growing AND are trading at discounts, you get your money in BEFORE the squiggle-scientists do, and that allows you to buy your shares BEFORE the market correction. You get your cash involved BEFORE the party starts, not halfway through it.
If you have any questions or concerns feel free to message me or leave a comment below, and I wish you all the best of luck with your own investing portfolios! But as Warren Buffett says, "Risk is not knowing what you're doing," so if your investments aren't risky, you don't really need any luck, am I right? ;)
DISCLOSURE: I only own 66 shares of 3D Systems right now, and I put in a market order this morning to buy 12 shares of Baidu.
I have plans to buy silver sometime this year, but I only want physical silver so I'm waiting for the chance to go to a coin show to buy it with cash. I do not trust online sites or dealers that require records of the transaction. The government has forcibly seized precious metals in the past and personally, I don't trust the government as far as I can throw them. OH! RANDOM FACT! If you wear silver, drones can't detect you! :D
I love Baidu, but as far as my personal taste, I don't like businesses that depend heavily on government regulation because it only takes minor changes to have major impacts on their balance sheets. For others, that's what makes them so attractive. EDIT: On second thought, I changed my mind! Their growth and discount is too good for me to pass up! They have had 5 years of consistent growth and at those growth rates it's good enough for me! I put in a market order this morning!
Stratasys has had unbelievable growth in the past quarter, but I'm waiting for them to post similar results for another quarter or two before I bite.
Apple is also fantastic, but I believe the economy is going to go back into recession within the next 3-5 years and businesses that sell luxury goods tend to be the first companies to feel the pain of contracting economies. But if you guys feel bullish on the market I'd say go for it!
I know that diversification is so heavily preached by Wall Street professionals, and while I do agree that diversification is important, I feel confident enough in 3D Systems' future, as well as Baidu, to only invest in those two companies. However, I know that you all will most likely prefer a diversified portfolio so I gave you the 5 best picks I could find :)
