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An interesting stock picking challenge
Old 10-22-2008, 07:54 AM   #1
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Join Date: May 2006
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An interesting stock picking challenge

Nouriel Roubini was on CNBC this morning - his only stock recommendation is anybody that makes and sells anti-depressants - along with Jack Rivkin.

Rivkin was under my radar screen before today, but I loved it when he said, "Don't pick a stock that you heard on TV. Do your own work." The unspoken, but clearly sent message was: "Only an idiot watches CNBC and buys a stock because some bozo in a suit plugged it!" So un-CNBC!

Anyway, Rivkin probably knows a thing or two about stock picking, he was the CIO at Neuberger Berman until he retired this past Summer. NB was the only piece of Lehman's that wasn't included in the bankruptcy.
The 69-year-old wealth management company, which became part of Lehman Brothers in 2003, remains a strong business within the asset management industry - a financial services sector that's insulated somewhat from Wall Street's present chaos, according to analysts..."Neuberger Berman would look to be a franchise that would survive independently," says William R. Katz, an analyst with Buckingham Research in New York. "The money managers have good reputations - they have the relationships with the clients,"
Rivkin has a solid resume of stock picking and asset management back to 1968.

Rivkin said several times he would not be a buyer at the moment, but apparently he must have said something about having a list of stocks he was interested in. The talking heads pressed him to puke the list out, and he did, but in an interesting way.
Half of these trades I like, but not the other half. Do your own work and figure it out for yourself.
He presented them as pairs by industry, but he said that each pair did not necessarily represent an investment he was interested in and one he was not.
C - Your local bank
I own only one of these issues (DOW), but have been interested in all but a couple of them at one time or another. Since we're still working on figuring out where the bottom is in this market, and I'm sure I'm not the only one who wouldn't mind picking up some real bargains, I thought I would play with Rivkin's list as a mental exercise with an eye on maybe finding a real buy and invite others to play along. Hey, it beats watching the red numbers on the screen.

If you care to join in, pick eight long term picks from the list and give some thoughts about your choices.
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Old 10-22-2008, 05:15 PM   #2
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Ok I'l play.

CNQ-TLM don't know enough to comment.
PFE-PG. I own Pfizer (sadly) but I think P&G is like Coke is almost certain to be around for the rest of my life. Over the next 3 years PFE, 3+ years P&G.
CAT-CBI. No clue about Chicago Bridge and Iron. I'm a long time holder of CAT, global infrastructure is still a growth market. Several billion folks are finally emerging from subsistence living and they'll need better infrastructure, roads, government & commercial building, cell phone towers, ports, airports etc. Cat makes the machines that make that possible. I'm still up almost 100% on my CAT stock (more if I include dividends). Every year I write a Jan 100 call on the company, when hits that price I will relcuntantly sell it. Unless management does some really stupid things.
SHLD-TGT I don't understand retailers, they are my equivalent of Buffett's tech stocks. Sear Holdings is a strange hyrbrid, retailer/REIT/investment company. I hate both Sears and Target stores so if force to chose SHLD.
STP-AMAT. I predict that in the next 10 year solar companies, such as arguably best in class Suntech, will make more money than solar companies have made in the last 50 years. However, that number is still tiny number and will probably stay that way forever. Applied Material (AMAT) makes equipment which that is essential for the digital economy. The digital economy is here to stay and so is AMAT.

Mon-DOW. Don't have much of a clue. This is basically a coin flip for me, but I go with Monsanto - there ads are cooler LOL.

C - your local bank. The smartest guy in my angel investment group, was the former head of Citi in various Asian county. I asked him a couple of weeks ago if he still owned Citi stock. He doesn't and neither do I. Your local bank on the other hand is in in a great position to pick up customers from the WaMu, Wachovia, NCC and other loser in the banking game.

FPL-AEP. I think both will do reasonably well because, if clean coal is sucessful than AEP will be the winner and that is my bet.
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