Skin In The Game: My Model Portfolio
I recommend about 250 stocks a year in this column, but in a typical client portfolio, I own only 20 to 30 stocks. Readers sometimes are curious about which stocks I own. Here’s a rundown on my current holdings.
The world clamors for American entertainment and information. I own Alphabet
The selloff in housing stocks bothers me, but I believe it’s overdone and am retaining D.R. Horton (DHI). The same goes for MarineMax (HZO), the leading retailer of pleasure boats. America’s Car-Mart (CRMT), which sells used cars, has a long record of consistent profitability.
For a long time, I resisted consumer staples stocks, since I think people pay too much for their presumptive stability. Recently, however, I bought Tyson Foods
Energy stocks have been the only bastion of strength this year in a weak market. I own three: Dril-Quip (DRQ), Pioneer Natural Resources
At this moment, the only financial stock I own is Berkshire Hathaway
I don’t expect a recession this year, but I figure the odds of one have crept up to about 40% from about 10%, as inflation roars and the Federal Reserve puts the brakes on the economy. Accordingly, I’m now holding four healthcare stocks, since these tend to be defensive in down markets.
I’m often heavy in industrial stocks, but not so now, with the Fed hitting the brakes. General Dynamics
In times of inflation, metals and mining stocks frequently do well. I have three in my satchel: Cleveland-Cliffs
This year, technology stocks have taken it on the chin worse than other groups. But the previous three years, they were the market leaders. In my opinion, many tech stocks have gone all the way from overvalued to undervalued during the past six months.
My current tech holdings are:
, which has a loyal following and a fortress balance sheet with $51 billion in cash and marketable securities.
- Lam Research
(LRCX), a specialist in etching semiconductor chips.
- Logitech International SA (LOGI), a Swiss maker of computer peripherals such as mice and keyboards.
- Sony Group (SONY), which is classified as a technology stock, but is more a conglomerate. It makes the PlayStation and parts for iPhones, and runs a movie studio.
- Texas Instruments
is more expensive than I usually go for, but is an immensely profitable semiconductor manufacturer.
Most managers use the classification system devised by Standard & Poor’s, which puts companies into 11 sectors. Nine sectors were covered above. I have no holdings at present in the real estate or utility sectors.
In almost every column, I give the performance of past column recommendations. I always say that “these results shouldn’t be confused with the performance of accounts I manage for clients.”
However, today’s column is about the stocks I actually do own for clients. Therefore, here is my firm’s performance for the 22 ¼ years through March 2022. On an aggregate of individual accounts, we are up 592% (including dividends), versus 371% for the Standard & Poor’s 500 Index. Past performance doesn’t predict future returns.
Disclosure: I own each of the stocks discussed today personally and for most of my clients.