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*** Update: My Best 15 Ideas for 2019 are up +14.6% YTD (Jan). Learn more. ***
Who would’ve thought? Some of 2017’s best ideas: Bitcoin, FAANG (again), and Marijuana. These were the 3 areas investors poured money into en masse in 2017. For the record, I’m not a big believer in Bitcoin, or any other cryptocurrency for that matter (it’s gotta be a bubble), but I own 4/5 of the FAANG stocks, and one of the pot stocks – Canopy Growth (WEED).
2018 might look very different…
Market trends come and go. There’s always going to be those ‘hot’ areas that everyone wants to invest in to “get rich quick!”. But if you’ve followed me for the past 2+ years I’ve been publishing this newsletter (which has 1,700 subscribers now), and have read my various books – Market Masters, Capital Compounders, and My 72 Rules – you’ll know that I stick to a clear portfolio strategy. And I’ve been investing in the stock market for 12 years. My strategy is pretty basic but it works for me…
Here’s how I segment my stock portfolio (learn more here):
1) Small-to-Mid-Cap Capital Compounders;
2) Mis-priced Large Caps (at the initial purchase);
3) Speculative Takeovers (Micro Caps)
I allocate a big chunk of my capital to the ‘Capital Compounders’, where I look to identify, and then invest in companies ranging from $100M – $10B (Small-Caps -> Mid-Caps) in size that have a long runway to grow. But there’s thousands of stocks to choose from on the various stock exchanges. So, my criteria is clear, and the hurdles are high. Not only must my stock holdings have a large addressable market, but also outstanding management teams that effectively operate their companies, and deploy cash flow to new opportunities with high rates of return to compound shareholders’ capital over time. These are also predictable, non-cyclical companies with durable competitive advantages (i.e., moats) which are more common in these sectors; Consumer, Technology, and Diversified Industries (e.g. Media, etc.). Return on Equity (ROE) is my key benchmark for these ‘Capital Compounder’ stocks. My Capital Compounder ‘Best Ideas’ for 2018 average 52% ROE (latest quarter).
You can learn more about my FULL Portfolio (I don’t just invest in these 15 ‘Best Idea’ stocks), Top Stocks, and Watchlist by becoming an exclusive Patreon member. There’s currently 20 members. Starting at $5.00, I’ll send you 12 issues / year. If you become a member now, you’ll get the next issue (December) at the beginning of January. And as a BONUS to all of my members, I’ll also be sending out my Portfolio Year-End Review in the next couple of weeks. Learn more here.
Anyways, I’m probably shooting myself in the foot by releasing my Best Ideas for 2018, but it’s all in good fun. Don’t do anything crazy and put all of your money into these 15 stocks 😛 (and for that matter, Bitcoin *shudder*). Always conduct your own research, and due diligence.
My 15 Best Stock Ideas for the New Year – 2018
1) Capital Compounders (Small and Mid-Cap Stocks; $100M – $10B)
– National Beverage (FIZZ)
– Tucows (TC)
– MTY Food Group (MTY)
– Premium Brands Holdings (PBH)
– Savaria (SIS)
– Pollard Banknote (PBL)
– Spin Master (TOY)
– Match Group (MTCH)
– Photon Control (PHO)
– Richelieu Hardware (RCH)
2) Mis-priced (Large-Cap Stocks; $10B+)
– Yum China (YUMC)
– Alimentation Couche-Tard (ATD.B)
– Netflix (NFLX)
3) Speculative Takeovers (Micro-Cap Stocks; < $100M)
– Ten Peaks Coffee Company (TPK)
– Intrinsyc Technologies (ITC)
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