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Long Term Individual Holdings
I've mentioned before I take a pyramid strategy to my investing. The all-encompassing picture across the whole family looks like this:
70% low cost ETF base split into 5 categories: 20% small-cap value, 20% small-cap growth, 20% large-cap value, 20% large-cap growth, 10% international(5% developed, 5% emerging)
The other 30% splits out into long term winners(28%) and 2% that my wife lets me do whatever I want with, so that's my short term moon shot gambling allocation. Personally, I feel the 2% is more important than the other 98%..because the 2% ensures that I don't touch the 98%..for the most part.
The tricky part about investing is when to know you need to change course. How to identify that you're in a moment that will define the next 10, 20, 30 years of humanity, while also understanding who's on the other side of your transaction. Morgan Housel has talked about how everyone has different timelines. Some people have 30 years, some people have 3 years, some people have 3 months, some people have 3 hours, and what an asset is worth to all of those people are very different. To quote Morgan exactly:
How much should you pay for Google stock today? The answer depends on who "you" are. Do you have a 30-year time horizon? Then the smart price to pay involves a sober analysis of Google's discounted cash flows. Are you looking to cash out within 10 years? Then the price to pay can be figured out by an analysis of the tech industry's potential over the nxt decade and whether Google management can execute. Are you looking to sell within a year? Then pay attention to Google's current product sales cycle and whether we'll have a bear market. Day trading? Then the smart price to pay is "who cares?" because you're just trying to squeeze a few bucks between now and lunchtime.
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Why do I mention this? Well, becomes sometimes your 10 year or 30 year outlook needs to be adjusted. There's nothing wrong with that, to be a "long term" investor does not mean to bury your head in the sand. For example, a goal to own Kodak for 30 years in 1990 would have found you completely empty-handed by year 23 as the world around you shifted.
So now, in the current environment, as we turn the page into 2021, I'm taking a look at changing things up a little bit in the long term holdings. I have some beliefs in certain areas, sectors, etc. Overall, as I sit down and put pencil to paper, here are some of the names I'm currently considering:
$AMZN **
$ABNB **
$ISRG **
$IRDM *
$GS **
$SQ *
$LULU *
$AAPL *
$CVS *
$DIS **
$PINS *
$SNAP *
$ABBV *
$DOW *
$V *
*Already hold
** Already decided to continue to hold
You'll notice a couple of themes in here. Mainly lead by:
-Consumer, specifically "affordable luxury"
-Growing category leaders
-Quality value (with growth)
My plan is to get this down to between 15-20 names, if not less, buy those, and hold.
Expect more memos as decisions are made!
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