The Great White Buffalo
As elusive as they may seem they do exist, they really do. In true popular culture definition A Great White Buffalo is "the" perfect mate, that is usually unattainable. On Wall Street I would be willing to bet this would be equated to Berkshire Hathaway (NYSE: BRK.A) a company that has risen it's share price by over 10,000%! But what if I told you that The Great White Buffalo could be yours? Would you believe me? Well you should because it's true. They are called "Blue Chip" stocks, they are not as unattainable as they may seem and you probably already know most of them.
The Dow Jones Industrial Average (DJIA), or The Dow for short tracks some of the best Blue Chip stocks. It is a composite of the top 30 public companies: American Express (AXP), Apple (AAPL), The Home Depot (HD), McDonald's (MCD), Walmart (WMT), and Disney (DIS) to name a few (you can find the full list here). Since 12/SEP/15 when The Dow was at 809.23 it has grown 1,889 % to 16102.38 almost 40 years later.
The Dow is where these Buffalo's live and should be hunted. While firing money at The Dow Rambo style would probably yield acceptable results it isn't very efficient. So let's practice some trigger control and take the best shots possible like Chris Kyle.
Hunting these companies is pretty simple, most of the work is already done by the formation of the list. You will simply have to buy them at the best price which can be as complicated or simplistic as you make it. You could simply attempt to buy it at the lowest Price to Earnings ratio as possible or you can add in as many valuation criteria as you want. And to get even more complicated you could do your own industry research, sift through all the companies annual reports, and attempt to understand it's business model more than it's CEO does.
To get the idea look at Johnson and Johnson (JNJ), John and Johnson is a holding company, they own many different companies but all deal in Health Products. Their famous brands are Neutrogena, Listerine, Band-Aid, Visine, Acuvue, to name a few, and if you have ever had any kind of surgery
you have probably been operated on with Johnson and Johnson products. The industry they operate in is something that isn't affected by slowing consumer purchasing. In a bad economy people are still going to buy shampoo, medicine, and have surgeries. They boast an impeccable dividend record, having never decreased or stopped it since it's inception in 1987 with a current yield of 3.28%. They are fairly valued with a price to earnings ratio of 16 and boast the highest profit margin of any health product conglomerate I could find (25.39% for Q2 15'). Bottom line is it backs up it's position in the DJIA with great stats.
Your search for The Great White Buffalo is much closer to an end than you think. Sometimes the best companies to invest in are right in front of your eyes and with a company like Johnson and Johnson in your portfolio you are probably on your way to a no tear formula for investing. But don't take my word for it, do your own research.
The Dow Jones Industrial Average (DJIA), or The Dow for short tracks some of the best Blue Chip stocks. It is a composite of the top 30 public companies: American Express (AXP), Apple (AAPL), The Home Depot (HD), McDonald's (MCD), Walmart (WMT), and Disney (DIS) to name a few (you can find the full list here). Since 12/SEP/15 when The Dow was at 809.23 it has grown 1,889 % to 16102.38 almost 40 years later.
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| DJIA 75' to 2015' Taken from Google Finance |
Hunting these companies is pretty simple, most of the work is already done by the formation of the list. You will simply have to buy them at the best price which can be as complicated or simplistic as you make it. You could simply attempt to buy it at the lowest Price to Earnings ratio as possible or you can add in as many valuation criteria as you want. And to get even more complicated you could do your own industry research, sift through all the companies annual reports, and attempt to understand it's business model more than it's CEO does.
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| Get it?!? No tear formula!!! |
you have probably been operated on with Johnson and Johnson products. The industry they operate in is something that isn't affected by slowing consumer purchasing. In a bad economy people are still going to buy shampoo, medicine, and have surgeries. They boast an impeccable dividend record, having never decreased or stopped it since it's inception in 1987 with a current yield of 3.28%. They are fairly valued with a price to earnings ratio of 16 and boast the highest profit margin of any health product conglomerate I could find (25.39% for Q2 15'). Bottom line is it backs up it's position in the DJIA with great stats.
Your search for The Great White Buffalo is much closer to an end than you think. Sometimes the best companies to invest in are right in front of your eyes and with a company like Johnson and Johnson in your portfolio you are probably on your way to a no tear formula for investing. But don't take my word for it, do your own research.
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