T Nation

Best Stocks to Purchase and Hold


#1

What do you guys recommend? Which stocks are a bargain and may bounce back in a year of two? Fortunes can be made in times like this or at least some extra money. What do you guys speculate is a good buy?


#2

General Electric has fallen so far, it is a decent play.

Look for companies with no debt (which doesn't apply to GE, they have a shitload, but its in the price) that pay a decent dividend. Re-invest the dividends.

"Why dollar-cost average into these stocks now? Because the data from those really, really monstrous bear markets, the ones that accompanied the Great Depression, show that investors who bought dividend-paying blue chips and reinvested the dividend did just fine in the bear markets that lasted from 1929 through 1942.

Stock prices plunged during that period. The price of the Dow industrials plunged 87% from August 1929 through June 1932. Stock prices hadn't recovered much even 10 years later. In April 1942, the Dow industrials were down 74% from their August 1929 level. The Dow wouldn't see its 1929 price again until 1954.

But with dividends, an investor could have prospered even as the price of stocks went nowhere. Measured by stock prices only, an investor would have broken even from 1929 through 1954. But an investor who had collected dividends and reinvested them would have seen a 340% total return by 1954, according to the Wharton School's Jeremy Siegel, the author of "Stocks for the Long Run."

http://articles.moneycentral.msn.com/Investing/JubaksJournal/5-blue-chip-picks-to-beat-the-bear.aspx

He lists some good plays.


#3

A followup on GE:

"Two or more executives, directors or major shareholders purchased a large number of shares recently. Very positive."

http://moneycentral.msn.com/investor/StockRating/srsmain.asp?Symbol=GE


#4

Butts, bombs, beer, and bets.


#5

CL
NFLX
maybe VZ


#6

GE is going to get burned due to all of their liabilities that they undoubtedly will not be able to cover. Ever since they got into the finance game they have not been the same.


#7

Oil, precious metals!


#8

You guys seriously don't see Ford going for 30 bucks a share in 1-2 years?


#9

If you have no problem with sin stocks, look at Altria (MO) with an 8.3% dividend yield.

Also look at Kraft Foods (5.5%); A T & T (7%), DuPont (9.5%); American Electric Power (6%), British Petroleum (9.5 %), Diageo (5%), Vodafone (8.5%), and Merck (6.5%)

Personally, I think GE is hard to pass up at $7.06/share and a book value of almost $10/share.


#10

Ford has the same problem as GE. They got into the finance business over the car manufacturing business. They have some serious liquidation to do before they are going to recover.


#11

Tell ya what, Coca Cola has been murdered on Wall Street (I know all too well)... but do you see THE Coca Cola going away?


#12

Good example. This was one of the companies to survive the first great depression because they were able to sell their product overseas.

America needs more of these types of companies.


#13

I've been buying more beer wine and spirits stock.....there's gonne be some partying going on eventually.

I heard on the radio McDonald's has been doing well, but I haven't checked the price of their stock.


#14

Ford(3-6 year play), Pfizer, GE, MSW(3-6 year play), Coke and/or Pepsi. If a few other top companies continue to take a beating then there could be more good buys. Examples: Walmart or MSFT if they drop.


#15

Most of the return in stocks is from the dividend, over the long haul. Keep re-investing. When my wife's grandfather died, he was receiving $30,000 a month in dividends. Yeah he was fucking loaded.


#16

damn i didn't realize it worked out to sums like that over time.


#17

Like others, I think GE is a good buy. You won't be getting a dividend like it historically pays for a few years, but there is no reason to believe that they won't overcome the problems that have stemmed from their financial sector.

I don't think there is any way Ford will be back to $30 any time soon, but if you beleive the word of the company execs it should be a good buy. If F indeed turns a profit in 2010 you will see a big jump in price as that will be a good indicator that the company is indeed sustainable. At ~$1.80 a share it's worth the risk for a possible big return in 10 years.

I'm really liking Wells Fargo (WFC) and J.P. Morgan (JPM) right now. Both have taken big hits recently but still have decent, sustainable balance sheets. Neither company over-participated in the sub-prime mess and most of their losses are due to losses in the financial sector as a whole. Wells Fargo has taken a bigger hit since it picked up Wachovia last fall. This was clearly made in the best-interest of the long-term outlook for the company, but has hurt their stock in the short-term. There is talk that both companies could lose their AAA rating at the end of this month, but with the recent dividend cuts to free up cash on hand I'm not seeing this as likely. I jumped the gun a bit and got in on WFC for $11. It's a real bargain right now at $8-9.

I also really like retail right now. I think most any company that has a large market enough share will be doing well in 3-5 years. I am keeping an eye on Target (TGT) and JC Penny's (JCP) in particular. Both have taken a major hit as retail has suffered over the last six months, but both have large marketshares and good long-term outlooks. Personally, I'd stay away from Wal-mart for any long-term gains. As the economy recovers, shoppers will shy away from the cheaper goods and return to stores like Target. Wal-mart has directly benefited from the downturn but it will not last.


#18

He never sold. He'd buy high dividend stocks and just kept plowing the money back in. If you buy companies that are well-run and pay decent dividends (Coke, Pepsi, Exxon, Walgreens) then you'll make out well. You won't hit home runs but you'll wind up with one helluva stack of chips.


#19

Why is everyone obsessed with large cap stocks. I'd rather buy LQD (investment grade corp debt etf) and get a great yeild w/ 1/2 the risk of equities. Remember a lot of baby bommers who sold out of stocks are not going to be buying back in but will buy back into corp bonds.

As far as stocks go stick to stuff people need (like MO) and won't be taxed to bad by Obama. If US Corporations have to pay US tax on profits overseas that will really hurt GE which so many people are saying to buy here. Also I am willing to bet not many of us can understand anything going on at GE Capital. I know it is real compelling at $7 but the same could have been said of AIG, C, BAC etc.... I'm not saying GE is headed that way but why take the risk.

If you do a bit of homework you can find some great small caps with no debt and great products trading very cheap. STAR is my personal fav. Also look at MDAS.
I'd stay away from any mulitnationals and energy until we have more clarity on Obama's tax policies.


#20

Bear Market rally underway; play it if you dare!!