Self-Directed Excellence

This Week at MANIFEST (1/24/2020)

“Life is like a snowball, all you need is wet snow and a really long hill.” — Warren Buffett

This past week, we lost a very special charter subscriber to Manifest Investing. My Father. I think his ID number was single digits. He was also a charter member of our Chicago-based investment club, evolved into an investing warrior … and was quite simply, my favorite EAGLE.

A couple of weeks ago I huddled with my father over his monthly ritual of opening his E*Trade envelope. A careful slice of the envelope (he saved every single one of them, every one) and I heard him say some of my favorite words, “My Colgate-Palmolive stock is worth how much? That can’t be right.” A $2000 investment in CL was now worth $28,000. This was typical of many holdings. In fact, the gains in Gentex, Pepsi, and Vanguard Technology (VGT) were actually much bigger.

His experience with General Electric was “different.” He shared his disappointment with GE often.

But he fixated on the steady delivery of Colgate. As the accompanying image shows, the company occupied Mom and Dad’s Christmas tree. We first talked about this long ago, see: When Monsters Are Created. It’s a story about consumer and stakeholder loyalty. This past weekend, I noticed that all of the squeezed toothpaste tubes on the bathroom sinks (including those toted by his grandchildren) were Colgate. He left a mark.

The image of Mom and Dad was captured at an Investor Fair in Springfield, Illinois. Long story short, the Biomet investor relations representative had told Mom and Dad over breakfast that $2000 invested in Biomet circa 1980 was worth $1,000,000 in the late 1990s. It’s a fact. (For more, see Raise A Cup: Million Dollar Moment — April 2012) It’s also potential freedom. Magic and miracles happen when given a chance.

Dad was a magnificently complicated man. He often chided me for complaining about bears and investing. “Not all bears are bad. I give one to your mother every Valentine’s Day. Besides, we loaded up on some pretty good stocks in March 2009 thanks to one of your bears.” Much wisdom.

And, in closing, one of the simplest and 100% effective lessons ever: Lessons From Fathers & Simple Things, Solid Results (Some might note that this may have been the earliest reference to Five Below)

Bottom Line: Dad took his investment club experience back in the 1990s and deployed it with an IRA that was invested in a CD that also happened to be charging $75/year for “custodial service.” We recently calculated that it would have worth approximately $20,000 if left in that paltry “risk free” situation. We moved it to E*Trade and he carefully selected companies like Gentex, Johnson & Johnson, AFLAC, Walgreen/CVS and leaned heavily on Vanguard Technology (VGT) despite his age. His balance grew to be a lot more than $20,000. When we talked about “risk”, I observed that “Dad, you’ve NEVER, EVER, acted your age.” He didn’t think long term investing included the risk they talk about on television and teach in colleges and business schools. He was right.

For so many of the deepest lessons and love imaginable, THANK YOU, DAD.

MANIFEST 40 Updates

  • 23. Pepsi (PEP)
  • 32. Tapestry (TPR)
  • 39. Ulta Beauty (ULTA)
  • 40. Costco Wholesale (COST)

Round Table Stocks

  • Costco Wholesale (COST)
  • Dollar General (DG)
  • Five Below (FIVE)
  • Schwab, Charles (SCHW)
  • Skechers (SKX)
  • TJX Companies (TJX)
  • Tyson Foods (TSN)
  • Ulta Beauty (ULTA)

Best Small Companies (2020 Dashboard)

The status of the 2020 Best Small Companies can be tracked at:

Investing Round Table Sessions (Video Archives)

Investing Topics (Video Archives)

Results, Remarks & References

Companies of Interest: Value Line (1/24/2020)

The median Value Line low total return forecast for the companies in this week’s update batch is 5.5% vs. 4.6% for the Value Line 1700 ($VLE).

Materially Stronger: Wal-Mart (WMT), Aaron’s (AAN), Costco Wholesale (COST), AutoZone (AZO)

Materially Weaker: Conn’s (CONN), Designer Brands (DBI), Children’s Place (PLCE), Fossil (FOSL), Kohl’s (KSS), Ollie’s Bargain (OLLI), Molson Coors (TAP)

Discontinued: Avon Products (AVP), Medicines Co. (MDCO)


Market Barometers

The thing very few people tell you about “overvalued” markets is that, occasionally, the fundamentals arrive to justify them. — Joshua Brown

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 8.8%, a DECREASE from 9.7% 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.

Update Batch: Stocks to Study (1/24/2020)

Long & Short Term Perspectives. (January 24, 2020) Proj Ann Return (PAR): Long term return forecast based on fundamental analysis and five year time horizon. Quality: Percentile ranking of composite that includes financial strength, earnings stability and relative growth & profitability. MANIFEST Ranking: Combination ranking that equally weights PAR and Quality. VL Low Tot Ret: Value Line forecast, expressed as low total return forecast. Owner’s PROC: Projected Return on Capital via 5-year EPS forecast versus current capital — equity and debt. Morningstar and ACE and P/FV: Price-to-Fair Value estimates from the (2) sources. 1-Yr ACE Tot Return: One year total return estimates via ACE.

Dipped In Magic Waters of Technology

Dipped In The Magic Waters of Technology

With certain apologies to Field of Dreams and Terence Mann (James Earl Jones)

Terence Mann: People will come. They’ll come to Las Vegas for reasons they can’t even dream (yet). They’ll land at McCarran not knowing for sure why they’re doing it. They’ll arrive at the Convention Center as innocent as children, in a childish (but pure) quest. It is money they have and solutions they seek. They’ll wander and discover. They’ll find geeks and gizmos and remember days before the Star Trek stuff started taking shape and forming reality. They’ll cheer their heroes. It’ll be as if they dipped themselves in magic waters. The memories and dreams will be so thick they’ll have to brush them away from their faces. People will come. The one constant through all the years has been technology. America has rolled by like an army of steamrollers fueled by the next generation of locomotive engine. Technology has transformed time. It’s a part of our past — and a glimpse of our future. It reminds of us of all that once was good and things yet to come. People will come. People will most definitely come.

For those less familiar, this week is the Consumer Electronics Show in Las Vegas. It is the world’s largest trade show of its kind. The International CES (Consumer Electronics Show®) is the world’s gathering place for all who thrive on the business of consumer technologies. It’s where business gets done: on the show floor, in and around our conference program, in impromptu connections and in planned meetings and special events. Follow on Twitter via #CES2015.

We’ll be covering the show and providing investment-related feedback on a number of companies, including but not limited to: QUALCOMM (QCOM), Masimo (MASI), 3D Systems (DDD) and many more …

Coming Events and Attractions

Our expanded coverage of the update stocks this month continues as part of our quarter long test drive of this feature and the studies and shared ideas it delivers. Please tell us what you think and feel free to join in the Forum discussions for the deeper dives on some of the stocks.

We’re working to schedule the January Round Table. It will likely be on Saturday morning, January 31 at 10:30 AM ET. The January Round Table will be part of a series of webcasts during Groundhog Weekend — more information to follow.

Speaking of our 10-year anniversary and ALL THINGS GROUNDHOG, we’ll be firing up another year of superior stock selection as we launch Groundhog Challenge 2015 on February 2, 2015. It’s not too early to start thinking about your winners for 2015. Remember we welcome both individual investors and groups (investment clubs) … the ground rules are simple pick a minimum of FIVE and a maximum of TWENTY investments and we lock them in from 2/2/2015 through 2/2/2016.

Companies of Interest: Value Line

The average Value Line low total return forecast for the companies in this week’s update batch is 5.0% — a little higher than we’ve seen in the last few weeks.

Fundamentals continue to erode slightly. This update did have a slight exception, with modest boosts to expectations for companies like Bristol-Myers (BMY), Lilly (LLY), Merck (MRK) and Teva Pharma (TEVA) along with various other drug-related stocks. Pfizer (PFE) was a notable exception — with a slightly reduced long-term forecast.

Materially Stronger: Abbvie (ABBV), Lilly Eli (LLY)

Materially Weaker: Cameco (CCJ), Genworth Financial (GNW), Pan American Silver (PAAS), Barrick Gold (ABX)

Pfizer (PFE) dropped from $35 to $30 for the 3-5 year low price forecast.

Teva Pharma (TEVA) went from $55 to $60 for the 3-5 year low price forecast.

Standard Coverage Initiated:


Stocks to Study

The following update stocks are ranked in the top 10th percentile of all companies we follow (MANIFEST Rank > 90)