US Shares

[Jerome W]

Hello guys,

If you would have to invest in US shares, and hold them for 2 or 3 years, which companies would you buy ?
Would your choice be different if you would hold them for 10 years ?

I am a happy Apple shares owner but since that is the only US share I have, I would like to invest on different other companies.
I had the feeling to buy some Intel shares one year ago and did not. How stupid I have been.

Thanks for your advices !

[antipop]

I like BRK for the long term. I've had some success with KKR but it's not for the faint of heart.

I've recently changed my investment strategy and instead of holding stock in direct, I invest in ETF (SPDR, S&P600 small, ...). The benefits are that I don't spend time learning about the company and reviewing the financial statements, I'm immediately diversified, it fits my buy and hold strategy. You can get more outperformance by selecting the right geography/sector than selecting the right company.

IMO, US market is at the correct valuation (not overvalued yet) but I'd expect a pause or small correction before resuming the growth. On an inflation adjusted basis, the DOW and S&P are still below their highs.

Eurozone is massively undervalued, partly with reason, and I'd expect to be strong gains to have in the long term (strong pains in the short though). France will continue to suffer for a long time so I wouldn't invest massively there (CAC40 is different as the revenue is made outside of France, Total, Sanofi, BNP are good bets). Germany is and will continue to be the big winner for the next 10 years or more. Italy and Spain will make great recoveries as they did the reforms that were needed and now will start to reap the fruits of their effort. However, Europe could be badly hit during the next crisis (which I believe should be a mild one) as the economy is very fragile and could break at any moment unlike the US.

Emerging Market will make a come back in the mid term. They suffered a lot after the crisis as people were looking for safe assets. Now that risk appetite is back, they should attract a lot of capital. Don't expect to make a lot of gains in the next year or so but in the next five, it's a good bet which I'm making.

Japan is a tough one and I've been burned before. Africa will wake up ... someday and it's still very risky. China is having difficulties switching from an export economy to a sustainable internal consumption. They have a lot of challenges ahead and they could get into big troubles when the growth cannot be sustained anymore. China due to its size shouldn't be included in the EM group. India, forget about it.

Finally, I don't see a financial bubble looming so far. Yes, govies are at record low levels and won't come back up and this leads investors to seek more risky deals which in turns lower the pricing of risk. But we're still at an early stage and I don't see a lot of stupid things on a major scale. High Yield is trending but it's still at a healthy level. I believe we have a year or two ahead of us but I'm trying to stay aware as you never know where the next crisis will come from (massive Ebola outbreak in Africa reducing trade and travel worldwide, Ukraine crisis spreading to the rest of the region, Middle East in turmoil, China/Japan going to war...)

[audio bill]

Georges, thanks for that very thoughtful and informative response. Personally I invest mostly with diversified mutual funds, since I'm not up for taking the larger inherent risks of picking individual stocks. Too many sleepless nights when I do that! After working for many years at AT&T Bell Labs and Lucent Technologies I've seen too many friends get significantly burned when the bubble burst.

[bart]

Originally Posted by antipop

I like BRK for the long term. I've had some success with KKR but it's not for the faint of heart.

I've recently changed my investment strategy and instead of holding stock in direct, I invest in ETF (SPDR, S&P600 small, ...). The benefits are that I don't spend time learning about the company and reviewing the financial statements, I'm immediately diversified, it fits my buy and hold strategy. You can get more outperformance by selecting the right geography/sector than selecting the right company.

IMO, US market is at the correct valuation (not overvalued yet) but I'd expect a pause or small correction before resuming the growth. On an inflation adjusted basis, the DOW and S&P are still below their highs.

Eurozone is massively undervalued, partly with reason, and I'd expect to be strong gains to have in the long term (strong pains in the short though). France will continue to suffer for a long time so I wouldn't invest massively there (CAC40 is different as the revenue is made outside of France, Total, Sanofi, BNP are good bets). Germany is and will continue to be the big winner for the next 10 years or more. Italy and Spain will make great recoveries as they did the reforms that were needed and now will start to reap the fruits of their effort. However, Europe could be badly hit during the next crisis (which I believe should be a mild one) as the economy is very fragile and could break at any moment unlike the US.

Emerging Market will make a come back in the mid term. They suffered a lot after the crisis as people were looking for safe assets. Now that risk appetite is back, they should attract a lot of capital. Don't expect to make a lot of gains in the next year or so but in the next five, it's a good bet which I'm making.

Japan is a tough one and I've been burned before. Africa will wake up ... someday and it's still very risky. China is having difficulties switching from an export economy to a sustainable internal consumption. They have a lot of challenges ahead and they could get into big troubles when the growth cannot be sustained anymore. China due to its size shouldn't be included in the EM group. India, forget about it.

Finally, I don't see a financial bubble looming so far. Yes, govies are at record low levels and won't come back up and this leads investors to seek more risky deals which in turns lower the pricing of risk. But we're still at an early stage and I don't see a lot of stupid things on a major scale. High Yield is trending but it's still at a healthy level. I believe we have a year or two ahead of us but I'm trying to stay aware as you never know where the next crisis will come from (massive Ebola outbreak in Africa reducing trade and travel worldwide, Ukraine crisis spreading to the rest of the region, Middle East in turmoil, China/Japan going to war...)

Merci Georges!

[Jerome W]

Originally Posted by antipop

I like BRK for the long term. I've had some success with KKR but it's not for the faint of heart.

I've recently changed my investment strategy and instead of holding stock in direct, I invest in ETF (SPDR, S&P600 small, ...). The benefits are that I don't spend time learning about the company and reviewing the financial statements, I'm immediately diversified, it fits my buy and hold strategy. You can get more outperformance by selecting the right geography/sector than selecting the right company.

IMO, US market is at the correct valuation (not overvalued yet) but I'd expect a pause or small correction before resuming the growth. On an inflation adjusted basis, the DOW and S&P are still below their highs.

Eurozone is massively undervalued, partly with reason, and I'd expect to be strong gains to have in the long term (strong pains in the short though). France will continue to suffer for a long time so I wouldn't invest massively there (CAC40 is different as the revenue is made outside of France, Total, Sanofi, BNP are good bets). Germany is and will continue to be the big winner for the next 10 years or more. Italy and Spain will make great recoveries as they did the reforms that were needed and now will start to reap the fruits of their effort. However, Europe could be badly hit during the next crisis (which I believe should be a mild one) as the economy is very fragile and could break at any moment unlike the US.

Emerging Market will make a come back in the mid term. They suffered a lot after the crisis as people were looking for safe assets. Now that risk appetite is back, they should attract a lot of capital. Don't expect to make a lot of gains in the next year or so but in the next five, it's a good bet which I'm making.

Japan is a tough one and I've been burned before. Africa will wake up ... someday and it's still very risky. China is having difficulties switching from an export economy to a sustainable internal consumption. They have a lot of challenges ahead and they could get into big troubles when the growth cannot be sustained anymore. China due to its size shouldn't be included in the EM group. India, forget about it.

Finally, I don't see a financial bubble looming so far. Yes, govies are at record low levels and won't come back up and this leads investors to seek more risky deals which in turns lower the pricing of risk. But we're still at an early stage and I don't see a lot of stupid things on a major scale. High Yield is trending but it's still at a healthy level. I believe we have a year or two ahead of us but I'm trying to stay aware as you never know where the next crisis will come from (massive Ebola outbreak in Africa reducing trade and travel worldwide, Ukraine crisis spreading to the rest of the region, Middle East in turmoil, China/Japan going to war...)

Thanks a lot Georges !
I should hire you as my personal wealth manager !

Sent from my iPad using A.Aficionado

[Antonmb]

Great post Georges.

I don't have this level of knowledge, but can at least recommend John Deere (Deere & Co, symbol DE) as a good long-term holding.

[cma29]

I don't buy individual company shares. Instead I invest in low-cost, exchange traded funds or ETFs and build a portfolio based on a target asset allocation.

My top choice is small caps value ETF from Vanguard, VBR. I know, not too exciting.

[antipop]

Originally Posted by cma29

I know, not too exciting.

Exciting usually means overvalued I like boring when investing

[antipop]

Originally Posted by Jerome W

Thanks a lot Georges !
I should hire you as my personal wealth manager !

Sent from my iPad using A.Aficionado

You can pay me in listening sessions Actually, I hate taking the responsability of someone else money. I'd make a very bad wealth manager.

Are you in still in holidays ? If not, you should come by

[Jerome W]

Originally Posted by Antonmb

Great post Georges.

I don't have this level of knowledge, but can at least recommend John Deere (Deere & Co, symbol DE) as a good long-term holding.

Thanks Tony !