My Top Five

pologuy64 · #1 02-24-2007, 10:44 PM

Theses stocks are the bulk of my portfolio Like, Dislike??

TM, JPM, PG, LYO, MSFT

Is this a good make up?

almostbusto · #2 02-25-2007, 01:14 AM

right off the bat, they are all large/mega cap stocks. personally i think small cap is the place to be. you should at least consider a little more variety.

as for the companies themselves, i won't comment since you probably know more about the individual firms than i do.

gull · #3 02-25-2007, 02:29 AM

Dislike. Individuals stocks unnecessarily concentrate risk.

almostbusto · #4 02-25-2007, 02:47 AM

[ QUOTE ]
Dislike. Individuals stocks unnecessarily concentrate risk.

[/ QUOTE ]that makes about as much sense as saying index funds unnecessarily lower returns.

meditate89 · #5 02-25-2007, 12:09 PM

These companies look decent- none of them are awful... The one I'm most enthusiastic about is PG. I would definitely recommend holding onto that for a long time.

I'd like to echo the sentiment of almostbusto- look for some smaller cap stocks!

I'd definitely sell LYO and buy COP (big holding of mine) because I think it has better growth aspects. Also.. they have nearly same yield... yet cop's payout rate is only 15% compared to LYO's 30%. Obviously you need to do a lot of research before making such a big switch.

Desertcat did a write up on 'NICK,' a small cap financial company, that you should be able to find- I actually have a small position in this company.

I think it's important to compare all of the companies you own to other potential opportunities... if you find something that is much better, don't be afraid to switch. For example... go through whatever you can find about WFC and compare it to JPM.. which one would you rather own? (I'm not saying one is necessarily better than the other here). You should always be on the lookout for companies that are offering you above average opportunity.

Also, you have to consider cap gains tax if applicable IF you switch in + out of any of these. Depending on your cost basis, it may or may not make sense to switch out of a few of these stocks.

The most important thing here is to do your own due diligence + research. Don't listen to the advice of anyone, including me, (and especially not gull). Do the research for yourself so that you can be confident in your picks. Putting up your 5 biggest positions without backing them up at all/ defending them is kind of meaningless. It's important to explain to yourself why these 5 stocks are better than any other 5 stocks you could possibly own.

hlacheen · #6 02-25-2007, 04:20 PM

Of the ones you listed I'm most optimistic about Toyota.

gull · #7 02-25-2007, 06:05 PM

[ QUOTE ]
[ QUOTE ]
Dislike. Individuals stocks unnecessarily concentrate risk.

[/ QUOTE ]that makes about as much sense as saying index funds unnecessarily lower returns.

[/ QUOTE ]

No, it makes more sense. My statement is true. Yours is false.

Hank Scorpio · #8 02-25-2007, 10:00 PM

[ QUOTE ]
Of the ones you listed I'm most optimistic about Toyota.

[/ QUOTE ]

Why?

AvivaSimplex · #9 02-25-2007, 10:30 PM

[ QUOTE ]
The one I'm most enthusiastic about is PG. I would definitely recommend holding onto that for a long time.

[/ QUOTE ]
That's actually the one I like the least. Mainly because Unilever (UN) does the same thing but has a lower PE and higher dividend. Plus UN has more of a European base, so an American slowdown won't affect them much, and you can benefit from the weaker dollar.

bav · #10 02-25-2007, 11:22 PM

Looks like a diverse set of companies that are safe and sound. Strikes me as a good core set of holdings. But I wouldn't put all my eggs in this basket.

I don't think 5 stocks is diverse enough. And as noted these are all giants with all except LYO having market caps of >$175 billion. You have no exposure to a great many industries and no exposure to midcap and smallcap growth potential.

My own personal take on it would be to keep this basic set of stocks unless you come up with some good reason to drop one or another and replace it with something better. I won't try to suggest individual stocks and I know of nothing terribly wrong with any of your choices. But don't concentrate everything in these 5--I'd claim no more than about 50% of your investments should be in these 5. Either do your own research and find some smaller companies in other industries worthy of investment, or settle on a reasonably-sized investment in midcap and smallcap funds.