Where Are the Sharp Investments?
Investing ideas can come from many different sources. Most of the ideas I get come from places like the AAII Journals, Seeking Alpha, and a handful of newsletters that I receive monthly. I used to look at the Wall Street Journal and Barron’s, but they often neglect the hidden stories. The best way to find good opportunities is to spend thirty minutes a week looking at various sources.
AAII Journal for January 2021
In the January 2021 AAII Journal, I read an article by John Bajkowski, the president of AAII. The article’s title was “Pandemic Effect Causes Revisions to Shadow Stock Rule and Holdings.” The article was a bit longer than most: 5 pages. One thing I look for when this type of article appears in the Journal is what companies are being removed from the “portfolio.” If I hold one of those positions, I may sell it. Usually, I don’t have one of these losers, because they failed my research tests.
More important to me are the “Additions.” In January, the additions were AP, GSL, and ORN. One of the nice things about this part of the article is that it shows the “Maximum Price to Pay.” In other words, try to pay less than the maximum. That is usually my objective. If the price is above what I want to pay, I set up alerts and watch for an opportunity to jump in. In the case of GSL and ORN, I decided both looked like good growth investments, so I bought 100 shares of each.
Target and Amyris
I know about Target. I own 300 shares of Target that are up 245% since I bought them. Target is a marvelous investment that pays a growing dividend for 52 years. Let that sink in. Target has been paying an increasing dividend since I was 18 years old. That is amazing.
Because I own shares of Target, I get emails from Seeking Alpha when there is a news story that includes Target. I received an email that said, “Amyris launches Pipette® clean baby care brand in 600 Target retail stores across North America.” It didn’t take me long to realize that this was a potential gold mine. The retail sales trend for the Amyris product line is increasing dramatically. Count me in, so I bought 100 shares.
Risk and Reward
Before you rush out and buy a hay wagon full of these needles (GSL, ORN, and AMRS) remember the potential risk. Therefore, like most investments, I only bought a couple of bales of these for my ROTH IRA. In each case I bought 100 shares. I like to think of $1,000 as a bale. Using this thinking, I bought 1.5 bales of GSL, ½ bale of ORN and 1.5 bales of AMRS. Also bear in mind that I didn’t just buy one investment. I bought three. My potential for a winner or two is increased by diversification. But I could have purchased three bad ones too.
Full Disclosure
I own 100 shares of ORN, 100 shares of GSL, and 100 shares of AMRS in my ROTH IRA. None of these investments pay a dividend.
Know Your Flocks & Herds 