A New way of looking at medium to long term stock investments
Guest Writer series: Francis K Meehan explores modern trends in assessing individual corporations for stock investing purposes
Part One. For our children's children. (read full article here)
Each week I will be adding the stock investments I recommend to my own portfolio. However, "just so you know" as modern mobile phone parlance goes, I will not until after the date of publication have any holding in those I select.
Each of us has a reason for investment in stocks and in this instance mine is F.O.G. No, this is not another newfangled over-the-counter derivative designed for obfuscation but simply "For.our.Grandchildren". You will gather for this purpose I would not envisage or indeed welcome a"roller coaster ride" from any of my choices and prefer slow but sustained growth over the medium to long term. This is not to suggest that my purchases are always as inherently safe as I expect these to turn out to be since in other dealings I am prepared to accept a higher risk for short term gains. With my F.O.G. selections I try not to do so though it's often difficult when I find something I really like. So instead of using the charts, the fundamentals or the p/e ratios, I apply my own tests.
I am not for one moment suggesting that these stocks will never as Shakespeare put it "suffer the slings and arrows of outrageous fortune". If any financial adviser tells you otherwise, beat a hasty retreat; you are in the hands of either a megalomaniac or a crook. Nowadays in stock investing, uncertainty is the only sure thing. Most of us grew up with parents who used expressions such as "safe as houses!" or "as good as money in the bank!" It's some time now since I last heard them. Obviously for good reason; we've had the three F's (Fannie Mae, Freddie Mac and foreclosures) which put an end to the former and countless bank failures and bailouts to the latter. The notions of a capital growth in the value of your home and a realistic rate of interest on your bank savings are now nothing more than a sick joke.
These days it's very difficult to see further than the end of the street in investment terms and so I have laid down certain criteria which my stock should conform to. If it does not I reject it for the purposes of F.O.G though I may still dabble given the right fundamentals in my general portfolio business. So which tests does my would be F.O.G stock have to pass?
First and above and beyond all, I want to know my corporations have a social conscience. To have that attribute is good for business right now and I believe into the future it will be increasingly so. I spent many years in England in the 80€s and 90€s and remember very well the Co-operative Bank, a mutual with three hundred branches, more commonly in the north of that country since it was formed in Rochdale Lancashire, at the end of the nineteenth century. During the time I was there and ever since so far as I am aware, the bank has stressed that it conducts its business on a strictly "ethical" basis by which description it means in practice it will not carry out banking for, or give loans to, or invest in any company it feels is not ethical. These include tobacco companies for example though of course the businesses those companies run are perfectly legal. I recall then that the bank's principles were considered oddball in some respects, a bit divorced from practical reality, maybe something freshers at university might demonstrate as being in favour of. Now I believe it's right on the nail.
The bank I refer to does not have branches in the USA and so should not be confused with the bank of a similar name which failed in recent years. As a matter of record it is one of the few UK banks which does not pay executive bonuses and did not need a bailout during the bleak days of 2008 and 2009, though I am not suggesting this was as a result of their ethical investment policy. Yet maybe in some small way it was, since perhaps this bank always took a more conservative approach due in part to its humble beginnings. There is something about that way of doing business which gives me a good feeling. (read the full article here )
Francis.K.Meehan is a retired company director and now financial journalist who has bought and sold stocks for over thirty years.
Part One. For our children's children. (read full article here)
Each week I will be adding the stock investments I recommend to my own portfolio. However, "just so you know" as modern mobile phone parlance goes, I will not until after the date of publication have any holding in those I select.
Each of us has a reason for investment in stocks and in this instance mine is F.O.G. No, this is not another newfangled over-the-counter derivative designed for obfuscation but simply "For.our.Grandchildren". You will gather for this purpose I would not envisage or indeed welcome a"roller coaster ride" from any of my choices and prefer slow but sustained growth over the medium to long term. This is not to suggest that my purchases are always as inherently safe as I expect these to turn out to be since in other dealings I am prepared to accept a higher risk for short term gains. With my F.O.G. selections I try not to do so though it's often difficult when I find something I really like. So instead of using the charts, the fundamentals or the p/e ratios, I apply my own tests.
I am not for one moment suggesting that these stocks will never as Shakespeare put it "suffer the slings and arrows of outrageous fortune". If any financial adviser tells you otherwise, beat a hasty retreat; you are in the hands of either a megalomaniac or a crook. Nowadays in stock investing, uncertainty is the only sure thing. Most of us grew up with parents who used expressions such as "safe as houses!" or "as good as money in the bank!" It's some time now since I last heard them. Obviously for good reason; we've had the three F's (Fannie Mae, Freddie Mac and foreclosures) which put an end to the former and countless bank failures and bailouts to the latter. The notions of a capital growth in the value of your home and a realistic rate of interest on your bank savings are now nothing more than a sick joke.
These days it's very difficult to see further than the end of the street in investment terms and so I have laid down certain criteria which my stock should conform to. If it does not I reject it for the purposes of F.O.G though I may still dabble given the right fundamentals in my general portfolio business. So which tests does my would be F.O.G stock have to pass?
First and above and beyond all, I want to know my corporations have a social conscience. To have that attribute is good for business right now and I believe into the future it will be increasingly so. I spent many years in England in the 80€s and 90€s and remember very well the Co-operative Bank, a mutual with three hundred branches, more commonly in the north of that country since it was formed in Rochdale Lancashire, at the end of the nineteenth century. During the time I was there and ever since so far as I am aware, the bank has stressed that it conducts its business on a strictly "ethical" basis by which description it means in practice it will not carry out banking for, or give loans to, or invest in any company it feels is not ethical. These include tobacco companies for example though of course the businesses those companies run are perfectly legal. I recall then that the bank's principles were considered oddball in some respects, a bit divorced from practical reality, maybe something freshers at university might demonstrate as being in favour of. Now I believe it's right on the nail.
The bank I refer to does not have branches in the USA and so should not be confused with the bank of a similar name which failed in recent years. As a matter of record it is one of the few UK banks which does not pay executive bonuses and did not need a bailout during the bleak days of 2008 and 2009, though I am not suggesting this was as a result of their ethical investment policy. Yet maybe in some small way it was, since perhaps this bank always took a more conservative approach due in part to its humble beginnings. There is something about that way of doing business which gives me a good feeling. (read the full article here )
Francis.K.Meehan is a retired company director and now financial journalist who has bought and sold stocks for over thirty years.
Source...