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3 Traits That Can Turn You into a Great Value Investor
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Welcome to Episode #94 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.
Recently, Business Insider has been posting articles describing the incredible long term returns of some of the hot stocks.
You know the titles. Articles like, “If you had bought Microsoft at its IPO, you’d be up 22,000% now.”
But how many investors actually buy at the IPO and never sell?
Or how many investors are even able to hold on for five years or ten years?
It takes more than just luck to be among the group that holds for that length of time.
Investors can develop the traits needed to take their long term investing to the next level.
But what are they?
3 Traits all Value Investors Need
1.Value investing is about buying when no one else is. It’s going against the crowd. That takes guts.
2.Once you buy a stock, you have to hold it. That sounds easier than it is. It takes patience.
3.What do you do when a stock plunges on an earnings report or lowered guidance? Do you know how to control your emotions when things get rocky?
Not Always Smooth Sailing
Every stock has rough patches. It may not seem like it given the market conditions of the last few years, but eventually even the FANG will hit a rough patch again.
Are you willing to wait it out during those rough times?
Netflix (NFLX - Free Report) ipo’d on May 23, 2002. Since then, it’s had enormous gains but the first two years from 2002 to 2004, were nothing to write home about as the stock gained just 35%.
Additionally, there have been stretches when the shares moved from being in the red to double digit gains in just 12 to 18 months.
It hasn’t been easy for long term Netflix shareholders. And there’s no dividend to ease the volatility pain either.
Stocks Out of Favor
It hasn’t been smooth sailing for these next four stocks either.
1.Wells Fargo (WFC - Free Report) has fallen 11% year-to-date but it’s cheap with a forward P/E of 12.
2.Newell Brands (NWL - Free Report) has lost 53% over the last year while the S&P 500 tacked on another 11.5%. It’s trading at just 9.5x.It also pays a dividend yield of 3.6%.
3.Chipotle (CMG - Free Report) is back to trading at 50x even though the shares are up just 18.4% over the last 5 years versus the S&P 500 with a 63.7% gain.
4.Disney (DIS - Free Report) is in the doghouse, down 10.5% year-to-date. Yet the shares are cheap, with a forward P/E of just 14.5.
Do you have what it takes to hold for the long term?
Find out the answer to that and more on this week’s podcast.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
3 Traits That Can Turn You into a Great Value Investor
Welcome to Episode #94 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.
Recently, Business Insider has been posting articles describing the incredible long term returns of some of the hot stocks.
You know the titles. Articles like, “If you had bought Microsoft at its IPO, you’d be up 22,000% now.”
But how many investors actually buy at the IPO and never sell?
Or how many investors are even able to hold on for five years or ten years?
It takes more than just luck to be among the group that holds for that length of time.
Investors can develop the traits needed to take their long term investing to the next level.
But what are they?
3 Traits all Value Investors Need
1. Value investing is about buying when no one else is. It’s going against the crowd. That takes guts.
2. Once you buy a stock, you have to hold it. That sounds easier than it is. It takes patience.
3. What do you do when a stock plunges on an earnings report or lowered guidance? Do you know how to control your emotions when things get rocky?
Not Always Smooth Sailing
Every stock has rough patches. It may not seem like it given the market conditions of the last few years, but eventually even the FANG will hit a rough patch again.
Are you willing to wait it out during those rough times?
Netflix (NFLX - Free Report) ipo’d on May 23, 2002. Since then, it’s had enormous gains but the first two years from 2002 to 2004, were nothing to write home about as the stock gained just 35%.
Additionally, there have been stretches when the shares moved from being in the red to double digit gains in just 12 to 18 months.
It hasn’t been easy for long term Netflix shareholders. And there’s no dividend to ease the volatility pain either.
Stocks Out of Favor
It hasn’t been smooth sailing for these next four stocks either.
1. Wells Fargo (WFC - Free Report) has fallen 11% year-to-date but it’s cheap with a forward P/E of 12.
2. Newell Brands (NWL - Free Report) has lost 53% over the last year while the S&P 500 tacked on another 11.5%. It’s trading at just 9.5x. It also pays a dividend yield of 3.6%.
3. Chipotle (CMG - Free Report) is back to trading at 50x even though the shares are up just 18.4% over the last 5 years versus the S&P 500 with a 63.7% gain.
4. Disney (DIS - Free Report) is in the doghouse, down 10.5% year-to-date. Yet the shares are cheap, with a forward P/E of just 14.5.
Do you have what it takes to hold for the long term?
Find out the answer to that and more on this week’s podcast.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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