Ok so i have not really made my picks for 2017 since i usually reevaluate my portfolio in march/may since now i m busy with taxes and getting tax forms ready for my clients. Plus this year i already made a big shift in my portfolio after the trump election.
Generally speaking I expect markets to largely move side ways in this coming year. I dont expect the markets in general to make to big a again or a loss this year. Mainly because the situation in europe is still very unstable and also in the US many investors are still uncertain what a trump Presidency will mean. On top of that the feds interest rate increases was very modest plus the ecb will have to keep it s rate low because of a still struggling Europe so i dont expect any major drops simply because the money flow is still enormous and obligations largely unattractive.
There are a few things to watch out though if any EU country will have a vote against the Euro I expect a major drop in these markets also more aggressive rate increases by the Fed or the ECB might send stocks diving. Another concern is that we might already be in a small bubble we have not seen a real down turn at least in the us since the housing bubble burst which makes me a bit more cautious. On the other hand we saw a lot of corrections during the last year starting with the chines market slide and ending with the trump presidency.
Now generally this year i expect Banks to do pretty well, I m sure that trump is gonna be more lenient with capital requirements then what was proposed or installed now so that banks profitability will go up again. Here my pick for this year would be Wells Fargo, Boa or a CS or UBS most of them already are treading higher then befor Trump and i expect them to keep on doing well this year. I would leave out European banks though other then Deutsche simply because the Euro is gonna lose against the dollar this year. Deutsche i would feel some what comfortable simply because they re still rather low from the blow they took last year, but it is a riskier pick then the before mentioned banks.
One of my favorite picks for this year is Nintendo even though they are still on a slight high from when pokemon go got released. You ask why nintendo? Pretty simple imho in terms of fan fare their the closest thing to apple their is. I mean basicaly all their recent releases broke records. They have a big fan base who would almost buy anything that has the name nintendo on it. Yes the mario app got harsh critics and the retro nes hardly makes a difference to their financials, but i m sure they ll figure out the monetization on their mobile app and the fact stands that there was a run on most of their recent releases heck i still dont have my retro nes. On top of that they got a new console in the pipe line which i think is gonna sell very well. Imho it s the perfect gaming station for a family and also anybody under 16 I mean you ll be able to play all the amazing Nintendo classics and on top of that most other games with decent graphics, which was not the case with the wii. Plus like i said bevore al the nintendo fans of which there are quite a lot are gonna buy the new console just like most hardcore gamers so i really think the new nintendo console will end up with great sellig figures which will also bee seen in the stock price.
That being said if you buy that stock i would recomend that you buy it in your currency or in USD to eliminate the currency risk.
Two other stocks that i feel are currently still underprised are Facebook and CRM they both like most silicon valley companies took a big dive after the trump election which imho we re not justified. We could kind of see that since bothe have already bounced back a bit from the hit they took. I would stil see them as a buy since IMHO FB will reach 135 and probably even crack that 140 mark this year just like i expect CRM to establish it s price above 80.
My favourit though especially for ore casual investor Berk-B its just buffet being buffet the nice thing about this stock is that through owning it you already get a nice diversification since the investments range from Insurance to energy to consumables companies. And imho the only thing to worry about is that the stock will probably take a big dive once warren is gone and at his current age of 86 will have to start thinking about this risk.
I also still like NXP semiconductors had a huge upside last year but again cooled down towards the end of the year. Why do i still like this stock? Quite simple they produce a chip that is in most smart watches so as long as the sale of smart watches and even smart wristbands (like in disney world) keeps on increasing they will be selling a shit ton of chips. Now even though i think smart watches are stupid i dont see this trend stopping just yet.
So these are what are my more conservative picks. Now lets move on to the more adventourose ones. Actually let me add swissquote for anybody haveing access to the swiss markets i would recommend Swissquote (SQN) probably my favourite banking stock out there right now.
Now to the more risky picks I really started to like twitter. Even though i think it kind of is a shitty run company the potential is enormous especially now that we have a president using twitter as one of his main means to communicate. Here s the thing while i dont see twitter all of a sudden coming up with a profitable business model i also dont see them not getting bought up by any of the tech giants if they keep on slumping around at 15/18$. I m sure FB google and even Amazon and probably some more traditional media houses are interested in Twitter and i m sure who ever buys it will have to pay a significant premium. Bottom line twitter became too important to just let them go bust and i expect a takeover within the next two years.
GPRO baisically same as twitter a shitty run company the only difference is that Gpro actually has a god product. I feel like the 9$ the get traded for atm is quite fair even though their P/E multiple is still very high I fell like this is mainly due to the huge flop they had with their drones. If you would take last years figures just from the camera selling business they would stand at an P/E ratio of about 15 which is slightly above industry average and still fairly priced. Now while i expect the price to still drop maybe even to the low 8$ I think if they sort out their Drone business they could easily go back to 10$ per share maybe even as high as 12 if the drone business actually starts taking of so there is a nice upside to it. Another positive thing is the Gpro still has unique knowledge within the action camera section and the value of the brand aloe is pretty big so also there if the price keeps on dropping i expect a takeover sooner rather then later which would give existing investors a nice profit even if they got in at 9$ and took some loss initially.
Note all the stocks i mentioned above are/were in my or one of the portfolios i manage. The ones mentioned are the ones i researched last year and are the ones that i m most likely gonna keep or initiate a position within the next 3 Month. I wrote this from the top of my head so if anybody wants more figures and facts i ll gladly provide them.
For the more experienced or adventurous investor there are always options, I had a incredible last year with options and since i think markets are gonna stay pretty volatile there is still a lot of money to be made with options. Anybody trying to get in to options with the current market conditions i would recommend trying a long straddle. Here you buy a put and a call option on the same underlying asset with the same expiration date. The goal is it to find a very volatile stock so then when the stock moves enough the gain from the call will offset the loss from the put or vice versa, this works because your loss is limited to 100% while your gain is not limited. Also if you wanna take even more risk and the stock is volatile enough you might get lucky and be able to sell both the put and the call at a profit. Ofcourse the risk is that the stock barely moves and you ll have to take a loss on both positions.
I personally had a lot of luck last year with that strategy and averaged about 65% on 23 long straddles that i did. Keep in mind that options are very risky and that you should only invest a small percentage of your portfolio into options. I for example have around 10% of my portfolio in options but with my clients I usually have a max of 5% invested in options unless he specifically asks me to take more risks.
I also wanted to say on the dividend thing it should not matter to you as an investor if you get dividends or not simply because if you dont get your money in dividends you ll get it as a capital gain so unless you think the company will reinvest the money badly there is no reason to prefer dividend yielding stocks.
From a tax perspective non dividend paying stocks are actually better then dividend paying stocks in most countries. Because you ll have to pay taxes on dividends once you get them but you dont have to pay dividend on non realized capital gains so you should be better of with the non dividend paying model. Ofcourse if the dividends you receive equals exactly the cash flow you need anyways and you cant be bothered selling of stocks every year to maintain your CF then dividends might be the way to go but in general you should not prefer one stock to another simply because it s paying out dividends.
Anyways generally speaking and for all the beginners the most important thing is diversify, dont invest into things you dont understand and never buy something because of hear say and you guys should do fine. Also when evaluating a company never forget to look at the management team, Which is arguably the most important. Let me put it like that a company with a shitty product but great management is way more likely to make it then a company with a great product but shitty management. Also before initiating a position make sure you check the short interest on the stock cos this imho give a very god picture on how the market views the stock.
Also i could not agree more with crzdcolombian on apple and just like him i used to be a huge fan boy and even held the stock till after they released their first watches. No new products in the pipline no innovation what so ever imho they are only living of the brand name and the hype but in the tech world that usually does not last if your product are not up to date. I have actually been playing with the thought of shorting apple but i feel like that s still a highly risky move.
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IBM then Crzd? Any large companies worldwide you would recommend?
Also, Can people say invest £400 in a company, and end up losing £1000 on that company, and how?
Not Crzd but i m still gonna answer
Why do you want to invest in big companies? On IBM on a quick glance they look solid none of their ratios look alarming and they had a solid year last year. What bothers me there is that they are already rather on the high side at 166 and i dont think they ll break through 170 any time soon. Also their short interest rose quite a bit over the last couple of months for such a big company which also suggest that the market sees them rather on the high side ATM. Of course for a final assessment more research would need to be done. From the huge companies in tech i Would prefer Amazon Google Facebook and even Salesforce atm. Other than that Banks and insurers should have a good year if Trump does loosen up the rules they have to follow atm.
For most people it s not possible to invest 400 and lose more then the Invested 400. Usually the instruments which could lead to such outcomes can not be bought by non professionals. Since most non professionals are just allowed to deal stocks bonds and options. You d most likely have to buy on credit or you have to be dumb in a options deal(excecise the option despite making a loss on them) in order to loose more then the invested money. You would need to sell short or bee involved in some kind of a swap arrangement in order to actually lose more money then what you invested or be on the wrong side of a obligation. And again short selling as well as most of the more complex derivatives cannot be traded by non professionals so you should be safe.
Edit:sorry for the huge post