Current trends of August 2015

Now this is a section of this blog that would be novel and more in line with a free analyst letter. But rather than recommendations, I would just outline the macro trends and put them out here .. we are not analysts and do not have their means of getting the CEOs on chair to talk. We dont attend the earnings call or look too deep into stats measures. However, we do notice the macro trends and maybe take some positions accordingly. The whole idea is to steady the strategy boat of investing. That means things could be fast or slow or steady depending on what it warrants. But never wavering. Never confusing or filled with anxiety. While analysts get a good closer look, the rest of us are not burdened by tunnel vision and can have a fresh perspective backed by numbers. We could be more reactive compared to them but we are also less bias prone and more diversified. From this vantage point, we can be closer to the truth and reality that on one's own dime there is little that any manager can do to actually beat the market substantially. However, on other people's dime you can make bank by drawing on expenses, commissions and brokerage and that is where essentially the meat is. From this vantage point, you are free to create. Create stuff or create money or create projects that are really useful and world changing.

So current trends indicate a worsening of oil prices. Hurray ! (Except for gas drivers from california where you continue to pay high:( ). This is reflecting in low prices of XOM, CVX and COP and similar stocks. Is this the low ranges and a good time to buy ? Maybe . Not to get to much into timing lest we worry about whether it will go down further or will it go up suddenly next month? Since we dont have answers to this, let us look at the stats measures. The pe is low for the sector. It seems good buys and no matter what we could hold it for some time. 

Maybe we need sector bellweathers so that we look at xom for energy and then based on this we can take positions in 2/3 stocks in this sector.

A quick look at the sector for this month from the google fiinance:

Energy: seems to be going down.

Finance: still looks awry and stinks of 2008

Tech: better off with the tech etf here .. too many changes

Industrials/Basic Materials/ Conglomerates etc: Nothing much to write about .. same old same old.

Utilities: Now here there could be some interesting buys .. but like real estate I would do some etf buy and hold off.

Then the August last week happened. The stock market saw some extreme volatility on account of Chinese stocks. Good time to buy some. Then there was a 1000 points downturn!! Nice opportunity if you had put some limits on stocks. But better off holding for now .. since these are testing levels. It recovered and then again sank and then again up and down. I would recommend holding positions in cash till august end. Sooner or later, this domino will fall. And even if it goes up , there is less room to expand signficantly unless someone tweaks the formula and gives more weight to certain stocks and pushes them high.

Thoughts on statistical points

Some stats measures like revenue or pe or institutional holdings are good measures to be used. For instance, if a company is small or medium and getting huge revenue that is an indicator that this is going to blow up quickly. However, if a large or established blue chip is getting revenue .. it is just a continuation of trend and nothing exciting and most likely the volume is high and hence margin on per sales item is usually low. Unless you are talking of an Apple where it banks hundreds of dollars on each of its products. Point is each and every measure has a statistical life, anamoly and a context in which it makes sense. After which it stops to make sense. In the rarified world or post distillation of all such measures in a stock, it is pretty much back down to the basics of business... what are you selling, how much are you making money and how much is your profit? Further, how much are you going to share that profit with your lenders and owners? Analysts from banks have a more direct and true view of things than bloggers and outsiders have. No matter which great letter you subscribe to or how much great of a stock picker, the analysts hear it directly from the horse mouth and the fund managers act based on that. There are then individuals investors like buffet who control the company holdings rather well but the core advice of this blog is to go the bogle way of indexing. Once you do indexing of say 50-60% assets diversified and decently timed thru the troughs of lower ranges buy and holdings and then sell thru the higher ranges to make modest gains and continued holdings, it is the remaining 20% that this blog is telling what to do. Hold the rest in cash. So that you have a good 60-20 holdings-cash split and 20 on stocks that you can identify with or want to get that extra few percentage points.

FDX FEDEX FDX!!!

So fedex fedex fedex ! 

Daily we see a host of brands that influence us subtly. In the case of US big brands or franchise stores, it is easy to get intimidated by the sheer size of MCD or FDX or UPS or clothing lines like TGT or Sears and so on. Remember, Sears about a 100 years ago was invincible and had the tallest building for a time in Chicago. Till they got eclipsed by Walmart which was another firm which dominated all lists out there. But it seems it is getting stiff competition from onlline as well as grocery stores or niche stores. Then there are zing stocks such as Netflix or Chipotle - two other brands which are top favorites among millenials so much so that it seems hard at the moment that anyone can go up against Chipotle in the fast casual segment or the utter domination of Apple or Netflix in their market means it is hard to fathom anything going down for this firms. Yet, we know that Samsung came up with some good products to counter Apple. For Netflix, there are tons of content companies and distribution companies with products that are pretty strong. And somewhere there is an unknown startup with boot capital from some venture capital firm that is sowing the seeds of being a giant killer in this segment. Thing is it is tough to get detached from brands. I got attached to Fedex by seeing their planes parked on a runaway. Seeing their cool vehicles and awesome customer service every time I visited Kinkos or just received a fedex package. The way their planes do the distribution which is not there in USPS or DLH or matched only to some extent by UPS led to me to believe that FDX is the bell weather for a lot of things including the manufacturing and can be called as a pulse. Rightfully so, many analysts look at this stock that way. So fedex is where this blog all started. I like Fedex and had them in sub 100 range and sold them once they hit 100 only to see that it went all the way till 180. 

Buy some ? Hold some ? Sell some? Low ranges and some high ranges? Yeah. I should have done that. Right now it is at 160s ... buy it ? Maybe sell some? Maybe stop timing? Which means just hold ? Go the passive route ? Which negates the purpose of this blog to go beyond the passive strategies .. as much as this set of studies is cool about passive strategies and its realm, somewhere out there, even if you are not a founder of a firm in which case you create the stocks from 0, you gotta have that analytical insight - whether science or art - something that takes you from 100 to 200 or like in apple case from 200 to 700 or google 100 to 1000 or something like that. That conviction and insight needs to be there. Since this is a product of a concentrated mind, it should be as a result of strong analytically oriented skill and conviction which differentiates the sell buy and hold points.

Fedex is in my buy low and sell hi list. I think at 170s it is high priced. A measure of P/E of 40 and above means it is highly priced. But then that is just a measure. The reason it was given this high valuation by wall street is because they saw something worthwhile in it and hence hedge funds and institutional investors are pouring money into it. It is 80% owned by them. So in all it is a good stock but at current price it is not much good. Maybe I can buy some - 10 bucks * 10 times out of 10k principal , which means shell out 100 bucks over time for this stock. Better yet, mark another 100 bucks when it goes down to sub 100 range. It stayed in the 80s a lot.

So that is my fedex template. No matter how strong the emotions. reel it in. It is common in life to get delighted by various products and services offered by various companies and get overwhelmed by their brilliance, great people who work there, seemingly endless supply of brains that are being hired by HR no matter what, and delight and fan boyism and cult and what not. But at the end of the day, like one Mr. Buffet, stay calm. He did not go with Fedex or Google or Apple or star bucks and so on .. so the same way, no matter how optimistically motivated you all. stay put. stay put for a long time. Even in the best case scenario, you are making some few hundred bucks so for that stick to your usual boring routine of low ranges and high ranges identification and then like a humpback whale, buy some and sell some and book the profits which would frost your main cake of index funds holdings. 

I am going to go further in the same vein and have similar conclusion on the less cool stock in this sector which is UPS though you will hear during holiday season how UPS is going to rake it in because of exclusive contracts with amazon and so on. Speaking of which, amazon did not deliver a profit in 20 years history from 1995 - 2015 .. it is a good service though. Will I invest? Super high prices and volatility prevent me from doing that. Same goes for chipotle and netflix. At 200 + P/e. just ignore it. 

Reflecting again, maybe if one holds on statistical measure and holds true to it, there is then a better chance of success. Case in point, just look at beta or p/e. Then buy hold or sell based on p/e only. nothing else. period. for p/e 8-16 keep buying. 16+ keep selling and holding off. That is a pretty good algorithm right there. Same with beta. I used to look at beta stocks and had a ladder of beta values. So anything less than 1 would be core stocks. Greater than 1 but less than 2 would be buy sell candidates and anything over 2 is in the basket known as zing stocks. 

At the time of this writing, xom is at 13, with cop and cvx following the route. Now might be a good time to buy the energy stocks. 

Starbucks- long lines in front of stores almost in every block in Manhattan and in prime areas in big cities and small towns leads one to believe that this stock will be ever green. One tends to forget the mundane coffee chains, people who might just prefer to take their own coffee and stiff competition in this sector. High p/e of 30s, near historical highs - stay away from it!

AT&T / Verizon at all - all good holdings stocks, nice dividends , att surprisingly has lower pe compared to vz. Look at the way this stock in stuck in the 30-35 ranges. 

MCD is another blue chip good stock for long term, there are noises that their sales are down and I almost see no millenials ever hanging out in mcd. Personally, I never go to that place but I can see how some might like it. 

DPS: Dr. Pepper is another favorite drink among many millenials and college going kids. Same pe range as coke and pepsi but less market cap, high institutional content means this is a good buy. Is this the right time to buy ? I will hang in there given the run up in prices in recent times. 

Starwood: HOT, I liked this a lot. There hotels are nice. The 1 year trend of this stock shows ups and downs which are ideal for the swing and day traders.  It is more stable compared to its peers, insti is high just like its beta. Maybe 50s is the range to swoop in.

Usually I avoid airlines but Southwest is an exception. They have been doing rather well. But the market is super stiff and notoriously low on profit. Wont buy this stock though. 

Kroger vs Walmart vs Target would be interesting. This is a good hold stock. For now it is expensive like the rest of the market. Target at 80 or costco at 150 not worth it.. while walmart is at 68 .. it shows the sector is going down a bit and it is just a matter of time before the party is over here. Like fedex these are also bell weather stocks. 

Home Depot is cool and both it and low move in tandem, similar pe etc. It is amazing how organized US industries are fedex and ups, hd and low, cvs and walgreens, you get the gist? If you have 100 bucks for each sector, put 50 in index and 25 each in such pairs! Another such pair is Master card and visa - again both good but high pe and cost.

Similar analysis for cvs, walgreen ,walmart and costco.

Tobacco stocks are slow moving but good dividend stocks. Right now highly priced but stay put. This is one sector you dont want to get in now. Consumer stocks such as HOG is good.

Rounding up on the tech side, the three main stocks are google, apple and msft for now. msft has been rolling in the mid 40s for a while. It is a stable stock is all. high pe, decent dividends but dont buy. google came up like anything few months ago when it jumped 70 bucks overnight. It is  massively over valued. high pe/near all time highs and has been a pricey stock all the times. Besides, you are holding it anyway thru index funds. And if you are in tech sector, why put your money in this? Apple, almost similar logic but has good moves and is coming back to 100s now .. then maybe a good buy. 

So that is all there for now. I think have rounded up a good point for investment here. This can be used as a core strategic point when devising the overall investment strategy.

Some endpoints...

There is always a shift towards "new" stuff .. new ideas and new transformations and new goals and new accounting methods or new  shift in paradigms or global trends or global business and so on .... so this "new" is one of the main constructor and driver for change and hence the market and market prices. There are new categories and business and segments and trade secrets in various abstractions and changes which did not exist earlier. This presents a major challenge to any automation. Hence even if you have an algorithmic approach or a mostly automated trading system, the underlying components will always require some or other  changes and tweaks.

Refer my earlier post on CEO pay, http://www.aflcio.org/Corporate-Watch/Paywatch-2014/CEO-Pay-by-Industry# and essentially these are executives that get paid to manage change and make sure that the company stays relevant, abreast of change and floating in a new world. The stock rewards are essentially a form of compensation.

Further dissecting my list of stocks: I think Directv is pretty good but will put it in a backburner mainly because of lack of dividends but it does have good growth points so I can just put them in the "more research needed" basket. The AXP and COF are good holds for long draw. Same with CAT or SBUX and MET. Continuing on the duality mode, T and VZ or KO and Pepsi are some that are also good as long as one holds on the down market. They are okay holders for the long term but good for the medium term. This is kind of vague statement but I will explore this more in the coming blogs.

Back to focusing more on the strategy and not the basket of stocks for the moment, I think some of the main reasons behind a non-free approach towards trading is the commission fees - now you can have a set amount aside and get some free commission trades .. there are apps like Robinhood or zecco at one time and Bank of America Merill lynch which are all decent brokers. Minus the commission factor, the basket of stocks can be traded a finite number of times. Without getting sucked into the whole quick trading scheme and thus letting your valuable mind space be occupied by such things as trades, shares, securities or investments - the real question is your staying power.

How far are you willing to stay put when the market goes up or down. Really it all boils down to the three action - buy/sell or hold. Buy and sell is easy. You can even set a target and be there. The hold and continue to hold is the key factor and when you are not in holding pattern you are either buying ( selling cash to buy stock ) or just plain selling your stock. In theory, if you have full confidence in this basket of stocks and if there are good ones which are more than making up for the bad ones maybe you can stay put. What do you do in this case- sell the good ones? Hold on to the bad ones? Or sell the bad ones and hold on to the good ones? What if the good ones go bad this time around and the bad ones are the ones that eventually performed well? Maybe something like that does not happen as market eventually rectifies itself - or maybe or maybe not. Frankly, the experience of 2008-09 financial crisis kinda left this aftertaste as to not overtly trust any particular company.

So one weapon in the hands of the retail investor or the small investor is the diversification. No matter what, do not get suckered into any particular stock no matter how much great it is going to perform in future. With the core being the dividend and utility players which are seen as more safe, there is a room for more along zing stocks and the bigger movers - along the lines that I have been building the stock basket of. Now assume we somehow construct this portfolio with a nice approximation of the stocks from various sector. Now, it is never possible to have an accurate weight-age so lets settle for an approximation.

Now, what do you do? If the stocks perform as per expectation for some time, giving dividends and making some decent upswings in growth - we hold on to it. Now comes the ride factor. Eventually all markets go up and go down. These things are not clear cut. They can happen suddenly and in case of individual stocks giving the investors very little time to react. Or they could happen over time. One may not be always glued to the news channel. AS there is life which is a bigger thing to attend to. Which is why the index funds are touted as an advantage since there is an automation factor already figured in the way the index funds buy and sell leaving the investor with focusing on the bigger picture instead. Or at least the big news events.

But I am still thinking about how best to strategize for stocks such as Fedex or UPS and how to handle them? Now, I am clear that this is not the algo to make a killing or something. But a few decent amount can be added, the core preserved and thus make the proverbial "make money work for you". Have to think about all this even more. Any ideas from anyone out there?

Anaylsis of stocks continued ..

Last time we saw the food sector in general. The conclusion was that at least at this point in May 2015, the valuations are high. The volatility is there. So this will be in the basket for now and I will revisit it when the sector is down or the market is down. In general, I would list food sector in the basket made of sector ETF + a few stocks that one is really comfortable holding into while emotions sway as the food industry is the  most visible industry out there.

Beyond food industry, one encounters the tech industry a lot. The apple, Google, AT&T phone industry, internet companies and social media are easy to spot. Like the food industry, they too are volatile but a bit more entrenched and have a stronger stability factor.

So I will create some portfolio - along the strategies .. such as bi low .. which will be a basket of stocks which I would buy only when they are in a low market. Think 2009. Another set of portfolio would be the zing list. This is something that I have done in the past too and used this list  for trading frequently or with in a medium term. I think this is a good strategy on a high market like now. Though a more efficient one would be to just stay put for now.

Meanwhile, the core portfolio compromising of stocks that are essentially a good one that you would hold for a long time, would be more like blue chip stocks, or maybe part of DOW or top S&P 100 stocks and so on. Though, belonging to such indexes by themselves mean nothing. C and BAC were also part of these when they tanked and were eventually removed from these indexes. Wonder where these indexes would be had these stocks not been removed.

A big reason I moved many of these materials from my personal blogs and notes to online blogs was to benefit the gen X and millenials and also more veteran stock traders as they could see the thought process, the evolution of the strategies over time and the ultimate evaluation. This is of course ongoing and it becomes difficult to keep track of various strategies and it is better if one sticks to one that one knows and more comfortable with. Rather than chase every existing or hot strategies of a moment. That is what is the key take away from more established investors out there. I dont believe in just buying indexes and then holding onto them. One has to sell them at some point. Just buying and selling indexes might be a lame exercise and I will do a testing of this one later down in the blog post. We have to essentially run a Monte Carlo simulations of the various scenarios.

Meanwhile, some of the stocks that come as evergreen for me is like Fedex or UPS. The reason being that it is a simple market, dominated by just two at the  moment. There are some tech startups which are striking to develop their own services. Chief among them is services like Uber or Lyft. If these somehow evolve to change to a short distance to medium distance courier service and when combined with the likes of Amazon and other local or national services with huge warehousing capabilities, we are looking at something that will give a strong competition for the likes of Fedex and UPSes. Easier said than done though as both these companies straddle Transport sector as they own aircrafts!, are global, can be categorized as a tech company apart from being the monopolized players in a saturated US market with extensive infrastructure and real estate holdings. Further they have very nuanced offerings like photos and printing amongst others. There are some emotional satisfactions in previous encounters in Kinkos too.

So dualities like FDX and UPS with tilt more towards UPS as they have a stable dividend is  a good deal. Same exists with other dualities such as HD and LOW or CVS and WAG and so on. Some of the retailers like WFM and KG could almost make that list. Point is take the top 2 or 3 and then stick with it. This is easily spotted in more matured and saturated markets such as the shipping services where Fedex or UPS operate but more difficult in other sectors such as say technology. Technology tends to be more diversified and though there are lines where Google and Apple are head on with each other, there are also integrated services where they are co-dependent. So I would stick to more neater categorization for now. Which also pretty much means that all these stocks in addition to the utilities and REITS will stay put in the may 2015 list for now.

TGT and WMT are the other stocks that shall also remain in the list. An interesting one is the COST .. as there are many costco followers out there just like some of the regional chains such as the wegmans/krogers/ralphs or trader joe kind. It is a good business and a standout has been the relatively low pay that the top executives take. Speaking of which, is there a service out there which lists down the companies with lower ceo pay or executive pays? Some has to do with passion for work than just more options.

MO is a standout and is an interesting holding stock. Though I am against cigar smoking I think most of these firms are just holding firms and pay rather pretty good dividends. Against MO we have PM, RAI and LO and a bunch of others with pretty decent dividends. I would put them in the bilo list given the high pe now and lower beta rate. These are core stocks once the market goes down.

Same with COST/TGT/WMT for now.

Disecting MO and abbot labs further, notice the random 50% drop in these stocks in the past. What to do in such cases? The more I dwelve and introspect about the markets and my experience with it, the more the realization occurs that it is not about a set of stocks but rather how you react to it that determines the outcome. At least to some extent. You can select a basket of stocks based on emotions, facts, numbers, statistical values, pure revenue and potentials, small town values, global appeal, entrenchment of said firms in a more developing country story or how well they are perceived in a particular sector or in the US. But a significant factor is also the behavioral dynamics of the investor. How much fees factors in .. in terms of commissions. How much does the time factor in .. what else could have been done during this time. The opportunity costs and so on. How would you react if the stock simply tanks and keeps tanking? What will you do if it keeps raising and raising? Is there any point in this? Or should it just emotionless and a math condition that a 20% uptick triggers a sell while a similar downtick triggers a buy? Would those models have fundamentally hold on when doing backtesting? Many instances says no. It depends on the gut. How much does a human truly discriminates between gut and emotion? Why need emotion beyond a point?

Back to baskets of stocks, Gilead seems to be the google of biotech industry. Which also means volatility. Same can be said of Abbot of which I am not aware much of but seems to be a bell weather in its industry similar to what JNJ or Pfizer does.

A good source to find the CEO pay is

http://www.aflcio.org/Corporate-Watch/Paywatch-2014/CEO-Pay-by-Industry#

Pretty nifty database with up to date numbers but if one goes by this most S&P 500 firms are going to be tough to get into justifiably. Most executives make a ton of money and some do okay work .. in the case of US, I think it is pretty much stick to the regulations and don't try something outsized or radical .. as long as one stays within a group, one should be fine.

Philosophically speaking, it mutes down the need for such exhaustive research and emphasizes the ETF or index fund line of thinking. Another justification to have the ETF or indexes as core of your portfolio in addition to cash! For individual stock picking, pick a few and focus on the behavioural analysis of yourself and how you are going to adhere by self laid out rules.  So what does one do mainly? I guess focus on one's own career and own a home/rental business and then own stocks/bonds mix via index funds as well as individual holdings but most importantly own your business. It could be anything from patented ones to any ideas or trade secrets or in these days something with huge data and scale which are managed by a software. But essentially, own a business. You may not want to be involved in it full time and want to do the nuts and bolts of it and then act as an adviser but it is essentially your own business is what will set you apart from the rest.

More on the food stocks ..

Today, I saw an interesting article about Shake Shack - for those who know a very popular burger joint in Manhattan area which is soon to foray into the LA area to take up the likes of IN N Out. On the culinary side, I am strongly on the Shake Shack side compared to In-n-Out. However, I got intrigued by the non culinary aspect of this companies. I got sucked into the food sector and soon I began comparing the Shake Shack with Habit Burger, Chipotle, the ever green MCD, and so on. Now, I am a big fan of Chipotle. And I had invested in the DRI - which has the olive gardens, DIN - apple bees, EAT and so on in the past.

Strictly speaking this list is easy to break down and really based on my food as well a the stock performance, I think it is better to stay with the biggies such as MCD. I am no fan of other places like Burger king or wendy or so on .. I like subway which is private. Among the chains, I like the pizza ones like Dominos or Pizza hut. When they go up, they can really go up and when they go down, they can stay there for a long time. Come bad news or Recession these are usually the first ones to go down. Hence, they bring up on this unnecessary stress to the investor as to whether to sell or hold on to these investments. Unlike say a MCD which like a WMT is a very diversified entity. On top of it, they are at all time highs at the time of this writing in May 2015. So for now, I would just hold off on this. Also, the food industry including MCD has the persistent problems about minimum wage increases, food preference changes in millenials, food quality, the chances that certain regions might not do well, real estate costs, unpredictable costs and simply plain old fact that a restaurant business is brutally competitive and you never know when a next truck is going to steal your business. Like on paper, I like the Potbelly more than the Panera breads more but it is the latter which has the better stock but no dividend yield and honestly does not correlate with the beta of 0.75 .. I see way more waivering and fluctuation of the graph. Add to this the higher forward PE. Investor psychology plays a role. For instance I like chipotle, shake shack, potbelly so might get emotional in buying and holding this stocks. Probably not needed for this. With MCD though, I never go there :D .. so maybe way less emotional about that.

Bottomline, even with MCD and the rest of the gang, I will just stay put for now. At max, these stocks might get added to a zing list. I will revisit them later in the down market.

The weeding of May 2015 list ..

As I have been doing some spring cleaning and weeding out and more importantly reselecting a new list of funds and stocks .. more so stocks, I will outline the process and data here. IT would be decidedly bad formatted or un-formatted but you would be able to pick up the gist.

First up the less interesting thing - the mutual funds and ETFs. This was fairly dominated by the big ones such as Fidelity and Vanguards and T.R.Price in the past. Now that I have more or less consolidated with Vanguard and some ishares ETFs, Vanguard pretty much will remain the core. Any data out there, the graphs with google finance or morningstar or any other charts pretty much point to the obvious conclusion that has been mirrored by lot of big names. The conclusion is that it is better off for a retail investor to hold on to the index funds or just do basic trading and re-balancing in them. Really there is nothing more to it or nothing that my experience in Finance as well as education in it has yielded. Part of the reason could also be that the index funds such as VTI periodically auto-rebalance themselves due to index changes or changes in weights of the constituents. Besides the graphs of several years point to this as a core strategy. Any back testing pretty much point to this. Add to that the human emotions and variables, I am pretty much doubling down on this as core holdings. Next to cash or treasuries, this is pretty much as safe and defensive and more offense-as-a-defense strategy as it gets.

Do you also want to hold some active funds .. just in case? In the past, FCNTX is the only fidelity fund and I am done with the rest of them. Vanguard has some good VWELX and balanced funds. I will stick with the vanguard ones here too. And no go with the rest.

That is pretty much it on the mutual funds and the ETF side. ETF in particular is interesting. I had good experience with them in the past when I put on various ETFs sectors in 2009 and booked some decent profits in 2010 thru 2011. I was convinced then that 2012 or 2013 could be a doom waiting to happen. But that is a timing problem and how to best deal with a rising market or how much to hold on too and so on .. that is a topic for a different day.

To the more interesting basket of stocks. Now stocks have different buckets in them. Dividend buckets such as REITS or utilities .. I think we can keep them on the side and subject to a different philosophy. Here we can simply divy them up into as many big stocks as possible and allot only to the very big ones. The ones from NY or NJ or OH or CA are so big in size that the chances of them going under are pretty minimal given the regulations maze that they operate under and the fact that they are being held by some of the biggest instituational investors as well as pension funds.

As mentioned earlier, some of the criterias that I had kept changing over time. Dividend was a big one and so was sheer performance once upon  a time. Some constant criterias were percentage of institutional investors - the higher the better as these guys more or less do their homework well. Fidelity in particular gives a pretty fantastic research tool ( bar none .. and leaves Vanguard way behind, TRP is a good second though I have not tried others but TD Ameritrade is decent too and so could be the likes of ETrade or TradeKing) which actually lists down the names of the institutional holders and the percentage that they hold of a particular stock as well as the changes over time. Pretty neat actually and a seriously handy tool and information set for people who are a bit more involved in trading and researching stocks. Given long time duration, beta is not that much of a draw. PE could be a slight thing to consider among other things. Remaining things more or less are out of the window though I do keep an eye of the location of headquarters, board of directors, number of employees and current dividend yield.

From the past, I culled out this list:

NASDAQ:WFM  NASDAQ:COST  NYSE:TGT  NYSE:WMT  NYSE:HOT  NASDAQ:MSFT  NASDAQ:GOOG  NASDAQ:AAPL  NYSE:RHT  NYSE:V  NYSE:MA  NYSE:WAG  NYSE:CVS  NYSE:HD  NYSE:LOW  NYSE:AXP  NYSE:COF  NYSE:DIS  NYSE:GE  NYSE:BBY  NYSE:CI  NYSE:EAT  NASDAQ:NFLX  NYSE:HOG  NASDAQ:CMCSA  NYSE:XEL  NYSE:PEG  NYSE:DPS  NYSE:KO  NYSE:PEP  NYSE:TJX  NYSE:AEO  NYSE:PFE  NYSE:MRK  NYSE:T  NYSE:VZ  NYSE:MCD  NYSE:JPM  NYSE:DD  NYSE:DPZ  CVE:FO  NYSE:RSG  NYSE:CVX  NYSE:XOM  NYSE:BA  NYSE:CAT  NYSE:UTX  NYSE:IBM  NASDAQ:DTV  NASDAQ:AKAM  NASDAQ:ADBE  NASDAQ:AMZN  NASDAQ:BBBY  NASDAQ:BIIB  NASDAQ:CHKP  NASDAQ:GILD  NASDAQ:SPLS  NASDAQ:SBUX  NYSE:WFC  NYSE:MMM  NYSE:ABT  NYSE:ALL  NYSE:MET  NYSE:BMY  NYSE:ETR  NYSE:EXC  NYSE:PM  NYSE:MO  NYSE:JNJ  NYSE:LLY  NYSE:ANTM  NYSE:AET  NYSE:BSX  NYSE:DE  NYSE:AEP  NYSE:ED  NYSE:D  NYSE:DUK  NYSE:FDX  NYSE:UPS  NYSE:LUV  NYSE:AWK  NYSE:BKS  NYSE:YUM  NYSE:TM

Add to this, the jcp/macy/kohls/garmin/JWN and so on .. all of which I have decided to stop investing in.

Another criteria that I had was not to bother if the size of the company is say less than a 5 billion range or maybe 10 billion range in similarly peer sized industry.That weeded out a lot of companies. While having an scillinating dining experience gives me an overdrive to invest in those companies, I think the food industry is too crowded though it is predictable. But I might keep them to ETF list too. I mean, I am interested in the DIN, EAT, MCD, YUM, DPZ, SBUX and so on .. and I think a lot of them are tech companies as well as food companies. So I am a bit interested in them and want to hold them. But I think strictly speaking, if the criteria were that "not to pay attention to these things over a long period of time", then these stocks dont make the cut. Because they fluctuate at times. Companies like Chipotle are relatively new but they fluctuate very wildly.

Just like Netflix in the video sector or the Directv or Dish TV and so on. To be clear, many of them have a sure shot role in a "zing" list but maybe I would just put them in this list and not really put them always in the core list. I dont want to be too reactive with such stocks.