In Search of the Perfect Investment

I make no predictions, just precautions.

+ Wash your hands.
+ Don’t touch your face.
+ Don’t shake hands. Fist bump.

 
+ Give yourself a little more “personal space.
+ Don’t do stupid. Recognize your health priorities.
+ Get the all the vaccines you need — flu, shingles, measles, etc.  In 2017-18 a bad flu season saw symptoms in 45 million Americans, and 61,000 deaths. That’s orders of magnitude worse than today’s coronavirus.

Reader reaction to coronavirus varies from — “selling all my stocks” to “This will be solved. I’m not selling.” How you react is personal. Personally, I see the selling as panic, and hence a buying opportunity. My concern is mundane. I see prices for many of my favorites are very high — based on conventional metrics like P/E ratio and likely upcoming growth.

Let’s mull on the future of stockpicking.

Take a lightbulb. A new LED bulb will give the same light for one-tenth the energy cost. Technology breakthroughs do not just affect the technology industry — like Apple, Google, Facebook, Microsoft, Adobe and Nvidia — they affect every company. For good or bad.

You need to factor disruptive change into where you put your money long-term.

Here’s what three big oil companies did over the past ten years — Exxon,(blue) BP (orange) and Shell (green). They’ve gone nowhere for the past ten years.

Now add Nasdaq (purple). The graph’s scale changes and you can see the miserable performance of these three leading energy companies.

Go one step further and add in Amazon. Notice how even Nasdaq palls. I added in some others — Apple, Costco and Bristol Myers (BMY). You’ll notice how poorly BP and Bristol Myers have done over the past ten years. It may be Cramer’s favorite. But BMY has done miserably.

The lesson in all this: You got to pick good and bad industries. My portfolio steers away from a whole host of “bad” industries — energy, retailers, drug companies, and banks. You will find nuggets of enrichment in these industries. But it’s not easy. Costco is an exception. I do pick industrials — but when I run across them — like Generac, Honeywell, ENPH and SEDG. I typically ease into them with small buys and watch them.

Pills save lives, but the wrong ones can kill

My favorite dentist, Robert Reiss, asks his patients to give him a list of all the meds they’re currently taking. He sees drugs that shouldn’t be taken together. Taken together they can make sick or kill you. He says many people don’t want to show their doctor all the meds they’re taking. They’re embarrassed. Or whatever. Their motivation is complex.

On Saturday, February 1, the New York Times ran a huge investigative piece on overloaded pharmacists:

How Chaos at Chain Pharmacies Is Putting Patients at Risk
Pharmacists across the U.S. warn that the push to do more with less has made medication errors more likely.
“I am a danger to the public,” one wrote to a regulator.

I can’t sum up the article. I was nauseous reading it. It contained:

+ My fellow pharmacists and pharmacy technicians are at our breaking point. Chain pharmacy practices are preventing us from taking care of our patients and putting them at risk of dangerous medication errors.

+ The last comprehensive study of medication errors was over a decade ago: The Institute of Medicine estimated in 2006 such mistakes harmed at least 1.5 million Americans each year.

The New York Times article is a major piece of research. The results are very troubling. You owe it to yourself and your family to read the piece and then be very very careful about the drugs you and your family are taking. CHECK. CHECK. CHECK. Click here.

No more helicopters

Last year we went sightseeing around Hawaii. It was fun. We made it back. But Kobe, sadly, didn’t.

Now Conde Nast Traveler writes