What are the “WGB Stocks” (StreetAuthority)

Sniffing out the market-beating "World's Greatest Businesses" from Paul Tracy's teaser ad

By Travis Johnson, Stock Gumshoe, October 29, 2012

The folks at StreetAuthority delight in lists of “bests” — best stocks for 2011, best stocks for 2012, best stocks to hold forever, we’ve looked at several of them over the years.

And now, what we’re being teased with by these folks are “WGB” investments … which, in case you don’t have the patience to sit through their ad, means “World’s Greatest Businesses” … so that tells you we’re probably following on with the theme that’s been espoused by Warren Buffett for decades, and more recently re-adopted by lots of newsletter writers: Buy big, safe, dominant companies who are so large and well-run, and in such strong positions with large “moats” around their business that can survive anything and pay dividends.

So it’s hard to respond to that with anything but a “sure, why not?”

And, of course, a “so which WGB’s you talking about, anyhow?”

Well, here’s a bit of the ad to give you a taste of how they’re teasing this idea:

“The Public ‘WGB Retirement Fund’ That’s Turned $55,000 into $123,200 in Only Three Years

“This ‘fund’ of just 12 stocks has beaten the market for years, nearly tripling the S&P in the process…

“Now you have the chance to buy into these 12 stocks, just as many of America’s largest pension funds already have…

“I doubt you’ve ever heard of the ‘WGB Retirement Fund.’ However, my research tells me it could be the only investment you’ll need to beat the market for years to come.

“Over the past decade, this ‘fund’ made of just 12 stocks has done something remarkable…

“In the most volatile period since the Great Depression, these stocks have seemingly ignored every “hiccup” the market has been through.

“In the past year, the stocks within the ‘WGB Retirement Fund’ have gained an average of 29.4%… compared to just 5.4% for the S&P.”

And then, after spitting out some big names that have “bought” the “WGB Retirement Fund” (Warren Buffett, Goldman Sachs, major pension funds), he does “come clean” and tell us that, yes, of course it’s not actually a “fund” …

“I call this opportunity the ‘WGB Retirement Fund,’ but the truth is, it’s not a traditional fund at all.

“This fund doesn’t trade on a stock exchange. And if you call your broker, they won’t be able to find the shares.

“Instead, the ‘WGB Retirement Fund’ is a group of 12 stocks that, when bought together — just like a fund would — offer a way to potentially beat the market without the need to worry about things like inflation or deflation… bear markets or recessions… flash-crashes or rising interest rates.

“In fact, you can buy all 12 of these stocks today and put them to work for your retirement portfolio right now.

“So what’s so special about these 12 stocks?

“Put simply, I call them the World’s Greatest Businesses –or ‘WGB’ for short…”

So that’s the pitch — and it’s an eminently sensible one for most folks, though I know many Gumshoe read