Manifest Investing

Best Small Companies – The Sixpeat

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“Stocks are rising: I wish I would have bought more at lower prices. Stocks are falling: Oh wait … Not these lower prices.” — Ben Carlson

“We believe that investing in emerging, well-managed small companies should be persistently pursued.” — Manifest Investing, November 2007

“A great small company, in our estimation, should exhibit the same characteristics as great medium and large companies.” — Ken Kavula, Expected Returns (December 2016)

This Week at MANIFEST (11/6/2020)

Stocks closed out their worst week since March. Anxiety is ruling the day on Wall Street with the collision of the pandemic and the upcoming election. (Morning Brew)

Stocks fell on Friday, led by the megacap tech names, to wrap up the worst week since March as coronavirus cases surged, U.S. fiscal stimulus talks broke down and traders braced for next week’s presidential election. Some buying in the last half hour of trading brought the major averages substantially off their lows of the day. Among the tech megacaps, only Google managed to eke out a gain following its Thursday earnings report, Apple pared more than 5% and is now more than 20% below its all-time high, Facebook fell 6% amid concerns about the 2021 ad market, and Twitter plunged 20% to wipe out its big run-up since mid-September. For the week, the Dow Jones average tumbled 6.5%, the S&P 500 sank 5.6%, and the Nasdaq lost 5.5%. (Seeking Alpha)

Best Small Companies (2020 Results)

Applause. Applause. There’s no way that celebrity audience at the Dorothy Chandler Pavilion could remain seated after seeing this. Get on your feet and celebrate another solid run for our Best Small Companies.

Yes, Virginia, that’s six in a row! The 2020 selections combine to deliver a total return of 13.3% versus 8.1% for the Wilshire 5000. The overall performance for the last six years now stands at 19.2% versus 9.7% for the total stock market.

VOTE For Remaining Fully Invested

I still need to dig up my research from a few years ago that makes the case that returns to investors is not about the party occupying the Oval Office. (Sorry if that doesn’t reconcile with your instincts or whatever proganda that current “journalists” are dishing out.)

As shown here, since Truman, it doesn’t make a whole lot of sense to “time” markets based on party affiliation.

Context & Perspective via Brian Wesbury, First Trust.

What If The White House and Senate Flip To The “Other Side?” Go shopping for some excellent companies. Assume ownership if the price (return forecast) is right. Maintain stewardship for as long as it makes sense to do so.

MANIFEST 40 Updates

  • 2. Cognizant Technology (CTSH)
  • 4. Microsoft (MSFT)
  • 6. Visa (V)
  • 12. Alphabet/Google (GOOG)
  • 28. FaceBook (FB)
  • 32. Amazon (AMZN)
  • 33. Oracle (ORCL)
  • 34. Wells Fargo (WFC)
  • 37. T. Rowe Price (TROW)

Round Table Stocks

  • Amazon (AMZN)
  • Booking (BKNG)
  • Cognizant Technology (CTSH)
  • EPAM Systems (EPAM)
  • FaceBook (FB)
  • Fleetcor Technologies (FLT)
  • Google (GOOG)
  • InfoSys Tech (INFY)
  • Microsoft (MSFT)
  • SEI Investments (SEIC)
  • T. Rowe Price (TROW)
  • Truist (TFC)
  • VMWare (VMW)

Results, Remarks & References

P.S. As always, your feedback and contributions on these weekly emails is welcome. If you come across some awesome content, please send it to markr@manifestinvesting.com

Attached file: First_Trust_Covid_19_Tracker_20201030.pdf (369 KB)

Companies of Interest: Value Line (11/6/2020)

The median Value Line low total return forecast for the companies in this week’s update batch is 7.1% vs.7.9% for the Value Line 1700 ($VLE).

Materially Stronger: Groupon (GRPN), Amazon (AMZN), 1-800-Flowers.com (FLWS), Cadence Design (CDNS), Cloudfare (NET), Square (SQ)

Materially Weaker: SAP (SAP)

Discontinued:

Demoted:

Note: The ticker for Absolute Software has changed from ABT.TO to ABST.

Market Barometers

“There’s a huge difference between an expectation and a forecast in investing. An expectation is an high-probability acknowledgment of how things might happen. A forecast is a specific prediction. In investing, forecasts are dangerous.” — Titan Research

Value Line Median Appreciation Projection (VLMAP) Forecast. The long-term median appreciation projection for the 1700 companies featured in the Value Line Investment Survey is 10.7%, unchanged from 10.7% last week. For context, this indicator has ranged from low single digits (when stocks are generally overvalued) to approximately 25% when stocks are in the teeth of bear markets like 2008-2009

Stocks For Interesting Times

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Suffice to say that 2020 has been “interesting” and it’s serving up persistent reminders about investing regularly and the imperative of demanding quality in our stock selections. This session is hosted by the Northeast Ohio chapter of NAIC/Better Investing.

Stocks For Interesting Times

Ken Kavula and Mark Robertson will attempt to convince and remind investors that (1) we have been here (or someplace very similar) before and that (2) explore what’s worked for eight decades and (3) demonstrate a search for actionable stocks to study.

Date: Saturday — September 12
Time: 10:00 AM ET

Registration: https://attendee.gotowebinar.com/register/5302382039023635982


Groundhog Challenge (2019 Results)

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This Week at MANIFEST (2/7/2020)

“Patience is genius in disguise.” — Hugh McManus

“The function of education is to teach one to think intensively and to think critically. Intelligence plus character – that is the goal of true education.” — Dr. Martin Luther King, Jr.

Dateline: 02/02/2020. Yep, it’s a Groundhog Day palindrome — a numerical formation that hasn’t happened for 907 years.

  • This week’s update includes that Value Line Investment Survey Issue No. 13 plethora of community favorites.
  • Our cracker jack team of accountants have been spending more time eating pizza, swilling adult beverages and lighting cigars with greenbacks than crunching Groundhog Data thanks to the YCharts data.
  • When the stock that dominates Groundhog portfolios, Ardelyx (ARDX), has a positive final day of the Groundhog season while the market suffers one of its worst daily declines in years — the standings get disrupted. Newcomer Kurtis Sears still took home the individual honors but surrendered the top of the overall leader board to a rogue band of knights.
  • And yes, if you believe in the Super Bowl indicator, you’re hoping the San Francisco 49ers pan some gold. As of January 2020, the indicator has been correct 40 out of 53 times, as measured by the S&P 500 Index – a success rate of 75%. Sorry, Mahomes and Kansas City …

HAPPY GROUNDHOG DAY, EVERYBODY!

  • The average annual total return for Groundhog Challenge participants over the last 13 years is 13.9%. The benchmark Wilshire 5000 has gained 8.8% over that time frame.
  • The total return for the WIlshire 5000 (VTSMX) during Groundhog XIII was 17.9%.
  • The overall performance leaders for Groundhog Challenge XIII (2019) and winners of the “institutional” category are our Round Table Knights (Mark Robertson, Cy Lynch, Hugh McManus and Ken Kavula.) The stocks (including the aforementioned Ardelyx) chosen by the knights netted a total return for the 1-year contest of 67.8%. If you’re not familiar with our monthly FREE webcasts, you should be. You can register for the February 25th (8 PM ET) here. Second place in the institutional category went to the Motley Fool — with their relative new ETF (TMFC) checking in at 30.1%. An honorable third place among the institutions went to Abby Jo Cohen at 29.5%. After a few really rough years on the Barron’s Round Table, it’s good to see Abby among the honorable mentions.

  • The individual championship went to Kurtis Sears (pictured here, with family) of Oklahoma. Kurtis had a considerable lead going into the final day — but the 1-day down draft in the general market combined with a positive day for ARDX turned the tables. Kurtis is a newcomer and bolted out of the starting gate with a 66.7% result for the 2019 contest. 2-time Individual Champion Hugh McManus checked in at second place with a 62.1% total return. Third place for individual honors went to Gail Goldstein at 51.4%. In Gail’s own words, “Thanks so much for the gift of bragging rights after coming in 3rd place in the annual Groundhog Challenge. I’m 81 years old and only started investing on my own about 15 years ago. It reminds me of the time when shortly after I taking up golf, I accidentally (seriously) sunk at 80 foot putt.” Gail clearly gets it. There are few things more important than ending up on the leader board of this Championship of the CIVILIZED investing world. Several community citizens turned in solid results including Kaye Light, Barath Arianayagipuram (top of the leader board for most of 2019), Marty Eckerle, Nick DiVirglio, Petra Linden and Ruth Wilfong. It was a banner year with a number of Hoggers topping 30% (see below). Good luck in 2020, Gail and everybody …

  • We have it on pretty good authority that the accompanying image on the right accurately reflects the mood and atmosphere at meetings of the Bower City Ladies investment club of Janesville, Wisconsin. Why? Because the Bower City Ladies are the Group Champions for the 2019 campaign — their third championship all-time and second in the last four years! The Janesville ladies join the Broad Assets of St. Louis as 3-time champions. Bower City netted a 38.7% return for the trailing year. I’m thinking we should set up an investing club cage match between St. Louis and Janesville (by the way, Beardstown would be approximately at the epicenter between the two) and do some serious open house stock selection. Second place in the group category went to perennial leader board presence, Herb Lemcool and his grandchildren, the Koolkids of Traverse City, Michigan (36.4%). Third place in the group category went to education stalwart Ken Kavula and his family investment club (31.5%).
  • We mentioned this before and we’ll post the market beaters for 2019 below — but a horde of group entries dominated the 2019 leader board. 40% of individual combatants beat the WIlshire 5000 but 57% of the group entries topped the stock market for Groundhog Challenge XIII.

Bower City Ladies — Janesville, Wisconsin. Sitting (left-to-right) Marcia Neleson, Lavina Kuzuhara, Sue Chwala, Susan Maciolek, Cec Vanderlip, Lesley Hammer, Janet Miller. Standing: Carol Hatch, Beth Drew, Martina Tse, Laura Sykora, Barb Cisler, Mary Anna Greene, Maria Enriques, Laurie March. Missing: Julia Walters, Nancy Presti and Jodee Helland

MANIFEST 40 Updates

  • 2. Cognizant Technology (CTSH)
  • 4. Microsoft (MSFT)
  • 12. Visa (V)
  • 13. Alphabet/Google (GOOG)
  • 28. Oracle (ORCL)
  • 31. Wells Fargo (WFC)
  • 35. T. Rowe Price (TROW)
  • 38. Facebook (FB)

Round Table Stocks

  • Alphabet/Google (GOOG)
  • Amazon (AMZN)
  • Booking (BKNG)
  • Cognizant Technology (CTSH)
  • eBay (EBAY)
  • EPAM Systems (EPAM)
  • Facebook (FB)
  • Fleetcor Technologies (FLT)
  • Global Payments (GPN)
  • Infosys Tech (INFY)
  • Microsoft (MSFT)
  • PayPal (PYPL)
  • T. Rowe Price (TROW)
  • VMWare (VMW)

Best Small Companies (2020 Dashboard)

The status of the 2020 Best Small Companies can be tracked at: https://www.manifestinvesting.com/dashboards/public/best-small-companies-2020

Investing Round Table Sessions (Video Archives)

Investing Topics (Video Archives)

Results, Remarks & References

Groundhog Challenge XIII (2019) … continued …

Here are the 2019 entrants that “beat” the Wilshire 5000 during the trailing 12 months. Congratulations to all of you. Press on!

Groundhog 2020: The Battle Resumes

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Battle? Yes, our 14th annual “battle.” The battle is part of our continuing demonstration that it is possible to humble the total stock market. And it’s more fun when we do it together. As we tally the 2019 results, please submit your 2020 entries. Good Hunting and Good Luck!

Groundhog Challenge XIV (2020)

We hold certain truths to be self-evident.

That most of us like to sleep at night.

That most of us believe in Occam’s Razor.

That “patience is genius in disguise.” — Hugh McManus

Most of us marvel at the performance of a relatively-passive model portfolio like our Bare Naked Million

We also pay homage to a few selected Rhinos. (Past winners have included Eddy Elfenbein, Abby Jo Cohen (Goldman Sachs), David Einhorn and Warren Buffett.) Some are included just for fun … it’s like playing against the “house.” #BeatJimCramer

We’ll keep it simple (again) for Groundhog XIV (2020).

Rules of Engagement

1. Enter by selecting a minimum of five (5) investments and a maximum of twenty (20) positions.

2. Participants will receive $1,000,000 in Groundhog dollars. The cool million will be divided evenly across the number of positions you decide to use. In other words, if you pick (5) stocks … we’ll divide the $1,000,000 evenly, creating a public dashboard with $200,000 each. If you submit (8) stocks, it’s $125,000 each.

3. Participants may submit entries as individuals and/or group (clubs).

4. No transactions will be permitted between February 3, 2020 and February 2, 2021.

5. Entries can be made between now and then and will be accepted until the market opens on Monday, February 3 at 9:30 AM ET.

Entries can be submitted by emailing markr@manifestinvesting.com or by posting here in the Groundhog Challenge forum folder.

Special Consideration. We will grant an exemption (an extension) to any group (investment club) that enters the fray during the month of February.

6. Stocks under $1 not permitted.

This is a total return contest — the influence of dividends is accounted for.

Who: The few. The proud. The brave. Bring your best ideas — club and individuals.