Elliott Gue will be a familiar name to longtime Gumshoe readers — he’s been a fixture in newsletter land for as long as we’ve been around (Stock Gumshoe’s sixth birthday was a couple months ago, thanks very much), and he’s got a new home. He ran the venerable Personal Finance letter for a while and built a bit of a name for himself as an energy investing specialist at Energy Strategist before leaving that publisher and signing on with StreetAuthority.
And now Gue is headlining several letters for StreetAuthority, including the StreetAuthority Top Ten Stocks letter that tries to pick out favorite ideas from all the other letters at that publisher. Several of the publishers have these “best of the best” newsletters, and they’re usually treated as inexpensive ways to get people introduced to the letters (and hopefully drive them to “upgrade” to subscriptions to the more expensive services they offer).
But that doesn’t mean they’re not useful or interesting, of course — and one of the ways they’ve pitched this service in the past, back when it was still helmed by founder Paul Tracy, was by teasing a list of their favorite “forever” stocks that you can buy and hold, well, forever. So whenever they trot out this teaser campaign, as they’ve just done under Gue’s signature, I like to have a look.
Why? Well, partly because lots of readers ask about these — and partly because, frankly, buying solid stocks of this ilk and holding for a long time is probably still the easiest way for an investor to do well without great expertise or a big time commitment. The average holding period for stocks is probably down to just a month or two now, maybe less, and that means a lot of individual investors are trying to time little market moves and are probably, on average, failing to keep up with the market — and paying higher commissions and taxes along the way.
I can’t get up here and tell you that “buy and hold” is the best or only strategy for everyone, of course, and it’s not the only strategy I pursue … but buying great companies and holding for many, many years — preferably with a nice, compounding dividend stream that lets the investment grow even faster — has worked better for me, more often, than most of the other strategies I use.
I know that the chorus of “buy and hold is dead” is rising in the chest of many of you right now, and that’s fine — we all have to make our own decisions. But I maintain that holding great companies for a very long time is the best and least risky way to grow a portfolio for most people — that doesn’t mean you have to buy and ignore them, of course, some decisions turn out to be bad because the company or the world changes, or because you were just plain wrong in the first place, but trading for the sake of “doing something” and trying to find the next hot trend is clearly a disastrous strategy for many small investors.
From a quick look at the picks that are teased, I think we’re going to find that several of them are repeats from the last “forever” list they teased back in 2011 — which would make sense, of course, if it was a “forever” stock two years ago you probably still like it today. But let’s dig in and see which stocks they’re keeping “secret”. I won’t have much chance to opine on each of them if I’m going to get to naming all ten, so I’ll leave much of the chatter to you in the comment section.
As in past iterations, they “give away” the top two names for free — the first is what Elliott Gue calls his favorite “Rockefeller Stock,” Brookfield Infrastructure Partners (BIP). That’s a publicly traded partnership that owns infrastructure assets, including a lot of utility assets (transmission lines, pipelines, connections) and transportation assets (railroad, toll road, ports), among other things (including a lot of timberland). The stock has been extraordinarily successful coming out of the financial crisis, with a very price appreciation and a solid and slowly growing 4.5% distribution yield.
This is one of those stocks that I’ve missed by always hoping it would get a bit cheaper — if rates rise considerably, it will be hurt, but they do own very valuable and long-lived assets, with regulated payouts, so that’s mostly just an interest rate risk (if you can buy a “safe” bond for 6% yield at some point in the future, the 4.5% yield from BIP will look less impressive).
And the second “freebie” is Google (GOOG). I have owned this one almost “forever” myself (I started buying about six months after the IPO and haven’t ever sold any), and if you can’t formulate an opinion on it for yourself it’s not for a lack of information — I consider Google one of the key utilities of the information age, and increasingly the most important advertising company in history. It’s not cheap anymore, but it shouldn’t have ever been cheap — adjusted for their huge cash balance they trade, on an earnings valuation, as pretty much an average S&P 500 Company. They’