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Opening Segment #3: |
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'Am
I
Diversified?' |
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Wednesday,
June 3, 2009 |
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In this segment, Jim
takes 2-4 callers
and asks them to
submit five stocks
that make up their
largest positions in
their portfolio.
He then comments on
whether or not they
are properly
diversified...
See callers'
portfolios below...
Jim:
I always
say, doing
your
homework is
the key to
smart
investing...
but, no
matter how
thorough you
are, even
your best
pick isn't
risk-free.
In the
volatile
market that
we've got,
it's
especially
true. So
what's
somebody to
do? You can
pack up your
cash and
head to the
backyard
bunker...
and wait out
the storm...
nah, that
doesn't make
sense. We
mitigate
risk here.
We mitigate
it by
diversifying...
A diverse
portfolio is
a robust
portfolio...
Successful
investors
cover their
bases; they
don't put
all their
eggs in one
basket.
That's why,
every
Wednesday,
we play
"Am I
Diversified?"...
(see
caller's
portfolios -
and Jim's
critiques -
below)
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See comments continued below...
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Wednesday,
June 3, 2009
(Cont'd from
above)...
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This caller had
the following
portfolio of
five stocks, on
which Jim
commented,
with his opinion
shown below them...
|
Jim's
rating on
this stock |
STOCK
SYMBOL |
Closing
price that
day |
Full Company Name |
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RIMM |
80.48 |
Research
In Motion (RIMM)
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WSO |
52.68 |
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COP* |
45.63 |
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EGO |
9.54 |
Eldorado Gold Corp. (EGO)
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PEP* |
54.27 |
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Caller:
I want to know if I
am diversified...
Stocks are:
Research
In Motion (RIMM), Watsco Inc. (WSO),
ConocoPhillips (COP*),
Eldorado Gold Corp. (EGO),
and
Pepsico, Inc. (PEP*)...
Jim:
Let's go to work...
Okay, RIMM...
A-rated, #1
technology stock,
along with
Amazon.com (AMZN),
Google, Inc. (GOOG)
and
Apple (AAPL),
right... we all love
those... we love
AMZN, GOOG, AAPL and
RIMM... WSO... we
recommended that in
the $40s, and the
stock and, when some
analyst downgraded
the stock, he was
wrong, we were
right. $52. That is
a company that is
heating and air
conditioning and
also a play on Cuba.
COP*, an
ActionAlertsPlus.com
name, down $2.50
today... maybe a
little bit more...
it is a natural gas
and oil name... and
refining... and VLO
stunk up the joint,
so oil went down a
couple of smackers.
PEP*... we've been
liking that stock.
It finally moved.
That's Indra Nooyi
(CEO)... If she
would ever love to
come on the show,
we've love to have
her. The stock's
finally breaking
out. I've been
buying that stock
for AAP all the way
down... not all the
way up... that's not
our style. EGO is
the cheapest...
that's right... it
has the lowest
finding cost of any
gold company in the
world... except for
Rating gold,
depending upon the
day.
Alright, so we've
got a tech, an
industrial, an oil,
a gold, and a soft
drink company. I
say, "hallelujah...
that was easy." He
knows how to play.
Verdict:
YES,
Caller's portfolio
is diversified.
▼ ▼
▼ ▼
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This caller had
the following
portfolio of
five stocks, on
which Jim
commented,
with his opinion
shown below them...
|
Jim's
rating on
this stock |
STOCK
SYMBOL |
Closing
price that
day |
Full Company Name |
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IR |
21.11 |
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LLY |
34.60 |
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SCHW |
18.18 |
Charles Schwab Corp. (SCHW)
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UPL |
45.12 |
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VZ |
29.59 |
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Caller:
I want to know if I
am diversified...
Stocks are:
Ingersoll-Rand (IR), Eli Lilly & Co. (LLY), Charles Schwab Corp. (SCHW),
Ultra Petroleum (UPL),
and
Verizon
(VZ)...
Jim:
Alright, it's a man
who likes yield too,
and I'm always
hungry for yield...
Let's start with
some high
yielders... LLY, one
of the
highest-yielding
drug companies with
a fantastic balance
sheet... I like LLY.
Verizon has Ivan
Seidenberg (CEO),
doing the best he
can. I like FiOS...
against Comcast,
plus all the others,
which is very
difficult... plus
the landlines have
been going down, but
that dividend is
safe, it's bankable,
and it's going to be
raised. UPL is
probably, without a
doubt, the best
single finder of
natural gas in this
country. The company
is always welcome on
the show. Charles
Schwab, a fantastic
brokerage house and
also custody of
people's money...
and Ingersoll-Rand,
a great
manufacturer, which
bounced off of $14,
and came right back
up.
A drug company, a
machinery company, a
financial, a natural
gas company and a
phone company...
Well... I think
that's
picture-perfect
diversification from
the man from
Illinois... and I am
thrilled... and,
once again, feel
beaten in this game.
Verdict:
YES,
Caller's portfolio
is diversified.
This caller had
the following
portfolio of
five stocks, on
which Jim
commented,
with his opinion
shown below them...
|
Jim's
rating on
this stock |
STOCK
SYMBOL |
Closing
price that
day |
Full Company Name |
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TDW |
47.80 |
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DO |
83.64 |
Diamond Offshore Drilling
Inc. (DO)
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PRE |
66.27 |
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OSG |
32.09 |
Overseas Shipholding Group
Inc. (OSG)
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TOT |
57.45 |
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Caller:
I want to know if I
am diversified...
Stocks are:
Tidewater Inc. (TDW),
Diamond Offshore Drilling
Inc. (DO),
PartnerRe Ltd.
(PRE),
Overseas Shipholding Group
Inc. (OSG),
and TOT...
Jim:
Alright, Chuck... We
have some serious
work to do... I
mean, we've got to
go to ER... I would
have said "House"
but this is NBC...
Let's start with the
easy one, okay...
We've got an
insurance company.
That's good. An
insurance company is
good, okay. But, in
poker, when you get
four of a kind, it's
like the greatest
thing in the world,
right?... But in "Am
I Diversified?"...
it's the worst thing
in the world...
Total, an oil
company... Diamond
Offshore, oil
driller... OSG,
moves oil...
Tidewater... oil
driller... Let's
see, we've got
1,2,3... 4 from the
patch... Man, I'll
tell you... You've
got to throw them
all back, except
for... I would
keep... I would
build around Total,
and then I would get
myself a... You've
got get in there...
you've got to get a
drug company in
there... you've got
to have a soft drink
company... maybe get
another machinery
company... But
you've got to make
those changes right
now, because you are
"Mr. Oil"... If oil
goes down tomorrow,
Mr. Oil, you will be
sipping cheap Scotch
on your linoleum
floor...
Verdict:
YES,
Caller's portfolio
is diversified.
This caller had
the following
portfolio of
five stocks, on
which Jim
commented,
with his opinion
shown below them...
|
Jim's
rating on
this stock |
STOCK
SYMBOL |
Closing
price that
day |
Full Company Name |
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KMP |
52.15 |
Kinder Morgan Energy Partners
(KMP)
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KMB |
52.99 |
Kimberly-Clark Corp. (KMB)
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NDN |
10.10 |
99 Cents Only Stores
(NDN)
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BDX |
68.94 |
Becton Dickinson & Co. (BDX)
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LINE |
19.31 |
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Caller:
I want to know if I
am diversified...
Stocks are:
Kinder Morgan Energy Partners
(KMP),
Kimberly-Clark Corp. (KMB),
99 Cents Only
Stores (NDN),
Becton Dickinson & Co. (BDX),
and
Linn Energy, LLC (LINE)...
Jim:
Wow... wow. I mean,
I've got to tell
you... This is my
kind of portfolio.
First of all, Linn
Energy... How about
the fact that, when
we had Michael Linn
on... and that stock
has been a monster
mover ever since
when he said that
dividend was safe
through 2012... One
of the great
yielders... That's a
limited partnership.
Now, I'm going to
have... let me tell
you why... there's
an issue here, so
stay tuned...
Kimberly... I think
the stock is
dramatically
undervalued.
Obviously, people
are worried about
Procter & Gamble...
The weak dollar is
going to help
Kimberly and the
stock yields almost
5%. That yield is
safe. 99 stores...
We know from the
numbers that came
out last night from
Dollar General, even
though it's private,
that group remains
hot. I like this
more than FDO at
this point... FDO
has come down a lot
though... BDX... the
stock is considered
too defensive, but
the company itself
is doing
terrifically. I
think it's a "rainy
day" stock. You hold
onto it.
Now, what do I do
here?
Two of my absolute
favorite stocks in
the world are KMP,
which just went up 8
straight points, and
has got that
fantastic yield...
Remember, we had
Richard Kinder on,
and we think the
world of him... And
we had Michael Linn
on... These are both
in the same exact
business. So I've
got to do some
surgery. I've got to
literally... I am
literally going to
throw LINE away,
because it's up
so... no,
figuratively, not
literally... I want
you to check out of
that one, and I need
you to move into a
financial... Let's
go with JPM... The
stock's hurting
because of the
underwriting...
Let's do that. And
this is the toughest
one that I've had in
a long time on "Am I
Diversified?"...
Because these are
two companies that I
want to hold onto.
But, because of the
way the game is
played, and because
of the way we
diversify, you've
got to sell one of
them.
Verdict:
NO,
Caller's portfolio
is NOT diversified.
[verbatim recap]
[end of segment]
Read Jim's next Segment
here
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Read Jim's next Segment
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