The Thanksgiving Portfolio
Welcome to the Schmoozeletter Blog. Your source for weekly water cooler wisecracks from the world of finance. If you have an opinion different than mine or a topic you want to hear about, let me know!
This week, we’re talking about:
The Thanksgiving Portfolio
Gobble, gobble.
There is no meal more delicious than Thanksgiving. The family gets together around some succulent supper, and good times are had by all.
Stuffing myself with countless carbs got me thinking: what would be a portfolio as mouthwatering as this fantastic feast?
Well, look no further than:
The Thanksgiving Portfolio
MSFT = Turkey
There is no stronger company in the world than Microsoft, so it is only fitting it gets the star place at the table. Like turkey, it might not be the flashiest or everybody’s favorite, but it ties everything together. You want something to anchor down your stuffing, mashed potatoes, and gravy, and there’s no fatter anchor than MSFT.
GOOG = Stuffing
The turkey is the star, but the most delicious food is the stuffing. Even with GOOG on a tear, already up 68% year-to-date, it’s still only at 30 forward PE, which has plenty of room for growth. You put a couple scoops of Google on your plate, and you’re off to a strong turkey day start.
AMZN = Mashed Potatoes
Similar to our Google stuffing, AMZN another staple currently trading at a reasonable price. With almost $700 billion in revenue the past twelve months and the leader in the clubhouse to win the robot wars, nobody is disappointed with some hearty buttery Bezosian goodness.
META = Sweet Potato Casserole
Now, we’re into some decadent deliciousness. The rich, sugary, brown buttery, gooey goodness of the sweet potato casserole has to be reserved for the delightful deal that is the cheapest stock in the Mag 7, META. With an over 20% increase in revenue, you won’t hear anyone say, “I’m just not impressed with the top line growth.” Just like you won’t hear anyone say sweet potatoes are too bland.
SPGI = Green bean casserole
Green bean casserole is boring. It is easy to make. It’s like three ingredients, and it is just consistently delicious. SPGI has a slow, steady business that is tried and true in good times and in bad. Raise rates, cut rates… doesn’t matter. People will always be getting debt rated, buying market index funds, and loving those crispy French onions on the simple banger.
COST = Corn pudding
COST may have the perfect business model. You think a few decades from now humans will still enjoy getting discounted eggs and insanely cheap beef frank meals? Of course they will. Corn pudding may be the perfect side. But it’s highly controversial. It’s so polarizing some people cross it off their plate entirely. And at a 45 FWD PE, Costco is a bit pricey for a lot of plates, but not so crazy a multiple that it gets booted from the table.
NFLX = Mushrooms
Mushrooms are all about the sauce. No company has more sauce in the content game than Netflix. With revenue growth continuing to take over the world and earnings exploding, NFLX is ready to be sopped up for years to come.
V = Creamed Spinach
Creamed spinach is one of those vegetables that is technically a vegetable but mostly just butter and milk and fatty scrumptiousness. Every bite is pure goodness. Visa has a gross profit margin of 98% and net income margin over 50%, so for every dollar that comes in, more than half is going straight to the bottom line. Some truly tasty financial metrics for V.
ASML = Canned Cranberry Sauce
It’s gotta be canned cranberry sauce. If you don’t see ridges on the side, it ain’t right. The canned stuff is the only choice just like ASML is the only choice for high-end lithography machines for chip-making. The over 100% free cash flow per share growth is as sweet as that questionable gelatinous red batch of chemicals which make the perfect condiment for a post-meal leftover gobbler sandwich.
UBER = Pumpkin Pie
UBER is at a great value, and with projected earnings growth of over 30% annually for the next few years, I expect the stock will do really well. But it is a bit more speculative, so it’s not the most necessary in the portfolio. Just like pumpkin pie, it’s here but if you drop it on the garage floor on the way into dinner, no one is too upset.
Final Thought
Thanksgiving portfolio would have been pretty tasty the past few years.
