Corner of Berkshire & Fairfax Message Board

General Category => Strategies => Topic started by: Viking on March 21, 2020, 12:37:33 PM

Title: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Viking on March 21, 2020, 12:37:33 PM
Here is the scenario. Your mother comes to you an says she has $100,000 in cash and would like you to invest it in the stock market in the coming weeks. She is going to give the shares, down the road, to her grandchildren (forget about estate planning and taxes). Ideally she would like to own 10-15 different companies. Here are her filters:
1.) safety of principal, adequate return is paramount
2.) large cap only (S&P 1000 type)
3.) best in class, experienced management team
4.) minimal leverage, ideally net cash balance (this would exclude companies like BAM)
- easily able to weather current storm without having to issue shares (diluting existing shareholders)
5.) stock is on sale today (this would possible exclude a company like Amazon)
6.) company has long runway of growth potential looking 10 years into the future (expected to be a winning horse)
7.) total return is goal (dividend income is not required)

What are your top 5 picks as of today?

My no brainer picks would be: Google, Microsoft, Facebook and Berkshire.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: no_free_lunch on March 21, 2020, 12:38:50 PM
I would add AMGN to your list.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: coc on March 21, 2020, 01:53:15 PM
If I had that mandate Iíd think hard about buying an index fund. Youíre unlikely to beat the market by more than a point or two and thatís optimistic. The index will be driven by those 10-15 companies anyways, and youíre certain to do well over time, especially from todayís prices.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Spekulatius on March 21, 2020, 02:17:57 PM
GD - they do have exposure to cyclical business jets (which may even benefit from the covid epidemic in the long run if you think about it), but most of the business is defense. Full order book and very cheap.

They do have some debt, but considering their largest customer is Uncle Sam, it looks like a save bet to me.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Uccmal on March 21, 2020, 02:31:09 PM
If I had that mandate Iíd think hard about buying an index fund. Youíre unlikely to beat the market by more than a point or two and thatís optimistic. The index will be driven by those 10-15 companies anyways, and youíre certain to do well over time, especially from todayís prices.

Concur: 2/3 SPy; 1/3 Country of origin.   
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: nickenumbers on March 21, 2020, 04:23:06 PM
My 5 No brainers are:

BRK- but we all own it.

Google [price is down nicely]
Disney [Price is down, and even if they have their revenue murdered this year, think 1, 3 and 5 years out.]
Bank of America [Great bank, great price presently]
Applied Materials, LAM, or a couple others in the Semi Conductor Industry.  [We are not going to need less technology, or fewer phones/devices.]
Amazon- [But I don't love the price.  It is good, better, but not great.  The herd has purchased into this position.  It is still a good long term one.]
Wells Fargo-  Price to value is amazing.


If you have a stomach for a volatile ride, I would look at VIAC, and some of the mid priced home builders like Lennar and DR Horton.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Spekulatius on March 21, 2020, 05:10:35 PM
CMCSA is quite cheap and the broadband business should be stable even in a downturn. Seems way less risky than DIS to me and also the valuation is lower.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Gregmal on March 21, 2020, 05:15:01 PM
TMO


edit, didn't really read the title of the thread as much as the op.

GOOG, BRK, ILMN, SPG, in addition to TMO. I'd also add MSG but its a smaller cap. Moats galore here. SPG probably seems quite speculative here, but so does basically all RE. I mean HHC for instance is at $40...
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Castanza on March 21, 2020, 05:22:02 PM
RTN still relatively cheap, and will probably see another leg down.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: TwoCitiesCapital on March 21, 2020, 06:29:41 PM

Berkshire
Google

Are the obvious "safe" candidates IMO given diversified businesses and massive liquidity.

Exor is on the list - particularly if their 9 billion dollar sale of Partner RE closes and/or if merger and special dividends from Fiat come through, but comfortable at these prices if even if that's not the case.

Not sure if it counts as a large cap, buy I believe Annaly (NLY) is also a steal at these levels given its ability to navigate the mortgage crisis and it's portfolio of govt guaranteed mortgages.






Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: sleepydragon on March 21, 2020, 07:06:39 PM
Berkshire - obviously
JPM+BAC+WFC - trillions of deposits
MO+PM - people will not quit overnight
INTC - I donít own this but all the computing farms are still running intel cpus
GD - private jets is essential for rich people
SBUX- itís a habit thing
TSCO - the horse, the chicken always need to eat.
BKNG - no net debt. Highly profitable and roe.



Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: clutch on March 21, 2020, 07:13:31 PM
BRK.B
AMZN
GOOG
MSFT
DIS

All looking at 3+ years of horizon
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: james22 on March 21, 2020, 07:50:48 PM
Presumably BRK is looking at some of these same names.

If they pick up GOOG, for example, I won't have to.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Gamecock-YT on March 21, 2020, 08:20:11 PM
CHTR/LBRDA/GLIBA - pick your discount
Visa/Mastercard -
AAPL
GOOGL
MCO/SPGI
CME/ICE

Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM
KO/SBUX/PEP
DEO/BUD/BF.B
CHTR/LBRDA/GLIBA/FB
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: meiroy on March 21, 2020, 10:21:46 PM

It's for the grandchildren, just buy the S&P index.  Don't bother with the rest.

Considering most of us here are not billionaires, a more interesting subject would be "what are your current top 5 safe microcaps"

Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: james22 on March 21, 2020, 10:34:34 PM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: ERICOPOLY on March 21, 2020, 10:55:38 PM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?

It isn't even illegal to marry a child in this country.  This is a country where masses of school children are riddled with bullets at school but freedom to own guns wins the day.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: elliott on March 22, 2020, 01:07:39 AM
while apple, google, facebook, disney, etc are great businesses, they are the names everybody is looking at too, even abroad (just look at forums in other languages, in other countries, you see those names again and again as "blue chips to buy now", "safest stocks to pick in this downturn", etc)

what are the chances that those stocks are mispriced? and if they are, which way?
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Spekulatius on March 22, 2020, 03:58:14 AM
Berkshire - obviously
JPM+BAC+WFC - trillions of deposits
MO+PM - people will not quit overnight
INTC - I donít own this but all the computing farms are still running intel cpus
GD - private jets is essential for rich people
SBUX- itís a habit thing
TSCO - the horse, the chicken always need to eat.
BKNG - no net debt. Highly profitable and roe.

I like GD, but not for the reason you mentioned. Gulfstream is an important business for GD with many years worth of backlog, but the most important business is its defense business. These are nuclear submarines, combat systems, tanks, cyber defense etc.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: sleepydragon on March 22, 2020, 05:04:41 AM
Berkshire - obviously
JPM+BAC+WFC - trillions of deposits
MO+PM - people will not quit overnight
INTC - I donít own this but all the computing farms are still running intel cpus
GD - private jets is essential for rich people
SBUX- itís a habit thing
TSCO - the horse, the chicken always need to eat.
BKNG - no net debt. Highly profitable and roe.

I like GD, but not for the reason you mentioned. Gulfstream is an important business for GD with many years worth of backlog, but the most important business is its defense business. These are nuclear submarines, combat systems, tanks, cyber defense etc.
Yes I agree. And GD is down a lot recently due to its gulfstream business.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: sleepydragon on March 22, 2020, 05:16:03 AM
My wife says HomeDepot is packed and websites selling seeds crashed due to too many visitors. Everyone is doing yard works
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: james22 on March 22, 2020, 05:20:44 AM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?

It isn't even illegal to marry a child in this country.  This is a country where masses of school children are riddled with bullets at school but freedom to own guns wins the day.

Is there a constitutional right to tobacco I'm unaware of?
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: cubsfan on March 22, 2020, 05:27:58 AM
My wife says HomeDepot is packed and websites selling seeds crashed due to too many visitors. Everyone is doing yard works

Yes, noticed this too - Lowe's and home improvement stores were packed yesterday.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: rb on March 22, 2020, 06:22:28 AM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?

It isn't even illegal to marry a child in this country.  This is a country where masses of school children are riddled with bullets at school but freedom to own guns wins the day.

Is there a constitutional right to tobacco I'm unaware of?
In the US the smoking rate is what 25%? Try to take away the drug of choice for 25% of the population and see how that goes for you electorally? Maybe there is some coocoo kamikaze congressman out there that sees this as his wet dream coming to life. But for the rest of them ain't gonna happen.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Spekulatius on March 22, 2020, 06:56:32 AM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?

It isn't even illegal to marry a child in this country.  This is a country where masses of school children are riddled with bullets at school but freedom to own guns wins the day.

Is there a constitutional right to tobacco I'm unaware of?
In the US the smoking rate is what 25%? Try to take away the drug of choice for 25% of the population and see how that goes for you electorally? Maybe there is some coocoo kamikaze congressman out there that sees this as his wet dream coming to life. But for the rest of them ain't gonna happen.

Maybe the tobacco industry gets on the bailout bill as well?

As far as the Argumentation goes - We had a really profitable business to kill our customers slowly to optimize NPV, now Covid-19 reaped our best customers quickly though no fault of our own! Put a picture of a tobacco farmer on a Deere tractor with Maga hat on the paperwork and off it goes.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: sleepydragon on March 22, 2020, 07:08:46 AM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?

It isn't even illegal to marry a child in this country.  This is a country where masses of school children are riddled with bullets at school but freedom to own guns wins the day.

Is there a constitutional right to tobacco I'm unaware of?
In the US the smoking rate is what 25%? Try to take away the drug of choice for 25% of the population and see how that goes for you electorally? Maybe there is some coocoo kamikaze congressman out there that sees this as his wet dream coming to life. But for the rest of them ain't gonna happen.

One reason for not owning tobacco stocks is some smokers will die from coronavirus and may decide to quit. This virus is especially bad for smokers
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: sleepydragon on March 22, 2020, 07:09:19 AM
Another stock is TJ Max
No position (yet)
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: rb on March 22, 2020, 07:12:43 AM
Always loved TJX. Hope it gets cheap enough to buy
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: james22 on March 22, 2020, 07:33:02 AM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?

It isn't even illegal to marry a child in this country.  This is a country where masses of school children are riddled with bullets at school but freedom to own guns wins the day.

Is there a constitutional right to tobacco I'm unaware of?
In the US the smoking rate is what 25%? Try to take away the drug of choice for 25% of the population and see how that goes for you electorally? Maybe there is some coocoo kamikaze congressman out there that sees this as his wet dream coming to life. But for the rest of them ain't gonna happen.

One reason for not owning tobacco stocks is some smokers will die from coronavirus and may decide to quit. This virus is especially bad for smokers

The argument will be made that smoking is now especially dangerous. Making it not-unlike other illegal drugs.

I don't believe it's likely, I'm just questioning if the possibility is priced in (I'm guessing not).


Interesting:

https://www.politico.com/news/2020/02/15/could-tobacco-cure-coronavirus-115329
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: ERICOPOLY on March 22, 2020, 07:44:59 AM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?

It isn't even illegal to marry a child in this country.  This is a country where masses of school children are riddled with bullets at school but freedom to own guns wins the day.

Is there a constitutional right to tobacco I'm unaware of?
In the US the smoking rate is what 25%? Try to take away the drug of choice for 25% of the population and see how that goes for you electorally? Maybe there is some coocoo kamikaze congressman out there that sees this as his wet dream coming to life. But for the rest of them ain't gonna happen.

One reason for not owning tobacco stocks is some smokers will die from coronavirus and may decide to quit. This virus is especially bad for smokers

The argument will be made that smoking is now especially dangerous. Making it not-unlike other illegal drugs.

I don't believe it's likely, I'm just questioning if the possibility is priced in (I'm guessing not).


Interesting:

https://www.politico.com/news/2020/02/15/could-tobacco-cure-coronavirus-115329

Smoking is the more likely target, by far, but a junk food tax should also see a tailwind from this too.  Heart disease, diabetes, and high blood pressure have covid-19 mortality rates of 10%-6% according to the Chinese CDC.  The external costs of the western diet are coming home to roost.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: rb on March 22, 2020, 09:15:47 AM
I would add two Canadian REITs to the list. RioCan and Granite. I know that Canadian RE was insane to start, but it didn't go down 50% since ppl stopped buying Corona beer.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: sundin on March 22, 2020, 10:17:17 AM
I would add two Canadian REITs to the list. RioCan and Granite. I know that Canadian RE was insane to start, but it didn't go down 50% since ppl stopped buying Corona beer.

I'd add Smartcentre and Plaza. REITs have taken a huge hit in Canada, I wonder how much of this is due to worry over rent deferrals/credit concerns vs actual liquidity of these stocks.

https://www.theglobeandmail.com/investing/investment-ideas/article-retail-reit-executives-are-buying-while-unit-prices-collapse/
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: K2SO on March 23, 2020, 07:35:52 AM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?

This is the kind of speculation that convinces me that these companies are amazing buys right now.
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Ross812 on March 23, 2020, 08:08:15 AM
I would add V, MA, and HD in retail to the list. KMI is not going to go anywhere either and I think it is a fantastic bargain right now. 
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: james22 on March 23, 2020, 08:21:53 AM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?

This is the kind of speculation that convinces me that these companies are amazing buys right now.

You think such speculation is irrational?

H.R. 2339 - Protecting American Lungs and Reversing the Youth Tobacco Epidemic Act of 2020

https://www.congress.gov/bill/116th-congress/house-bill/2339

NYSAFP calls for ban on the sale of all tobacco and vaping products during pandemic

https://wbng.com/2020/03/22/nysafp-calls-for-ban-on-the-sale-of-all-tobacco-and-vaping-products-during-pandemic/

Altria: The Potential Long-Term Impacts From The Coronavirus

https://seekingalpha.com/article/4333611-altria-potential-long-term-impacts-from-coronavirus
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: Castanza on March 23, 2020, 08:29:22 AM
Though I'd be tempted to just go long a portfolio of things you can get legally addicted to:

MO/PM

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal?

This is the kind of speculation that convinces me that these companies are amazing buys right now.

You think such speculation is irrational?

H.R. 2339 - Protecting American Lungs and Reversing the Youth Tobacco Epidemic Act of 2020

https://www.congress.gov/bill/116th-congress/house-bill/2339

NYSAFP calls for ban on the sale of all tobacco and vaping products during pandemic

https://wbng.com/2020/03/22/nysafp-calls-for-ban-on-the-sale-of-all-tobacco-and-vaping-products-during-pandemic/

Altria: The Potential Long-Term Impacts From The Coronavirus

https://seekingalpha.com/article/4333611-altria-potential-long-term-impacts-from-coronavirus

I agree, this is absolutely possible (although an outright ban is unlikely). Prohibition already happened in the US. You've got to love American politics. The same people calling for a ban on tobacco products are also advocating for the legalization of marijuana  ;D
Title: Re: What Are Your Current Top 5 Safe Large Cap Picks As Of Today
Post by: james22 on March 30, 2020, 12:47:38 AM
NY considering cigarette sales ban

https://seekingalpha.com/news/3556123-ny-considering-cigarette-sales-ban-report