Boy, one thing is certain… No one could have predicted that we’d be seeing the stock market at all time record highs one full year after the U.S. elections. In fact, if memory serves correct, there was a lot of uncertainty about the future of America as two polar candidates aimed to take the helm of this great ship. Reading blog posts I recall many selling some or all of their portfolio holdings in the months leading up to the November elections waiting for the inevitable correction to occur. Yes, we’ll see big market declines in the future but I can assure you that we’ll all be blindsided when it comes. Just look at how many international, political, financial and social threats that have cropped up over the last twelve months. And where are we market-wise… all time record highs. You can’t make this stuff up. On paper there have been dozens of issues that could have derailed this market but nothing has slowed its momentum. The left leaning anti-Trump movement is still in full swing (just imagine if they actually worked with the president to get a lot of his agenda easily passed… we’d be a lot further along), the far right continues to make its message clear and by all accounts we’re still riding high. Sure, the headlines continually read doom and gloom about all the things that could derail this market. Certain, technical readings look scary, the bull market is “long in the tooth,” it was a long term “jobless recovery,” etc. In other words I hear, “Blah, blah, blah and I think blah, blah.” Tune it out. Your portfolio value will go up and it will go down. If your aim is building an ever growing passive income stream tune it all out.
With that being said, it’s clear that not every stock has participated in this bull run, especially in the last year or so. That’s where I’ll look for my next potential buy. As Warren Buffett once stated, “The best thing that happens to us is when a great company gets into temporary trouble… We want to buy them when they’re on the operating table.” Clearly there are many companies on the operating table today. For November I will be considering Hormel Foods Corporation (HRL) and General Mills, Inc. (GIS) once again, each trading slightly above their 52 week lows and still sport safe relatively high yields. Seeing HRL yielding over 2% is a historically high yield for that stock.
Another stock that is looking ever more attractive, despite calls for a dividend cut is General Electric Company (GE). Talk about a company that’s on the operating table. It’s hard to ignore GE in the teens.
A couple health REITs are still looking attractive to me as well. Names like HCP, Inc. (HCP) and LTC Properties, Inc. (LTC) have seen significant declines in September and October and are looking a lot more attractive these days when compared to recent months.
Don’t fear the operating table. More often than not dividend stalwarts come out stronger given enough time. In recent years we have seen the likes of McDonald’s Corporation (MCD) being ‘operated’ on as expert calls about the fast food giant would have made you believe that it was all over for MCD. Look at fashion staple V.F. Corporation (VFC) performance since January of this year. Quotes like, “fashion is fickle,” and threats from Amazon entering the space would have made you believe VFC was D.O.A. Once again, VFC is not a fashion company. It is a ‘fashion staple’ company. There is a difference.
Of course, sometimes companies die on the operating table but I still believe one shouldn’t fear investing in ‘operating table’ stocks. They do tend to provide the best returns.
What do you think about my potential stock buys for the month of November? Are you considering any of these names for your own portfolio this month? Please let me know below.
Disclosure: Long HRL, GIS, GE, HCP, LTC, MCD, VFC