zxl2021
2021-09-13
not easy to pick winner
Getting Nervous? 5 Defensive Equities To Consider
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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":886034201,"tweetId":"886034201","gmtCreate":1631537599503,"gmtModify":1631890794678,"author":{"id":4094454557179640,"idStr":"4094454557179640","authorId":4094454557179640,"authorIdStr":"4094454557179640","name":"zxl2021","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":2,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>not easy to pick winner </p></body></html>","htmlText":"<html><head></head><body><p>not easy to pick winner </p></body></html>","text":"not easy to pick winner","highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/886034201","repostId":1132668749,"repostType":4,"repost":{"id":"1132668749","kind":"news","pubTimestamp":1631535840,"share":"https://www.laohu8.com/m/news/1132668749?lang=&edition=full","pubTime":"2021-09-13 20:24","market":"us","language":"en","title":"Getting Nervous? 5 Defensive Equities To Consider","url":"https://stock-news.laohu8.com/highlight/detail?id=1132668749","media":"Seeking Alpha","summary":"Summary\n\nMarkets, specifically growth names, have continued to power higher this Summer, defying gra","content":"<p><b>Summary</b></p>\n<ul>\n <li>Markets, specifically growth names, have continued to power higher this Summer, defying gravity yet again. At some point, value names simply must make a comeback.</li>\n <li>I am gradually positioning my portfolio towards value and defensive names. This may not be trendy, however, capital preservation I feel is appropriate given the levels at which we currently reside.</li>\n <li>I offer 5 defensive names that can be purchased at attractive prices currently.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1fc66cec85311bfc3fbf5f0fdc5aa19b\" tg-width=\"1536\" tg-height=\"1012\" width=\"100%\" height=\"auto\"><span>Colin Anderson Productions pty ltd/DigitalVision via Getty Images</span></p>\n<p>I do not know about you, but I am a bit nervous. The markets are hitting all-time highs left and right and it would seem if you have been simply throwing darts anywhere in the tech space, you are likely up big.</p>\n<p>For some reason, I tend to be the most anxious when things are going a bit too good and the past couple of years have put me into this headspace currently. In this article I would like to offer 5 defensive value names to consider for your portfolio.</p>\n<p><b>Overview</b></p>\n<p>In my wildest dreams, I did not think that the stock market would reach these heights so quickly after COVID-19 burst onto the scene. Quite a bit of trauma has been inflicted on our economy in the last 2 years, from the initial shutdown and supply chain disruption, to the digital transition many businesses had to navigate just to stay solvent, to the vast and unexpected worker shortage currently facing the country and last but not least, the rather worrying inflation trends currently percolating across supply chains.</p>\n<p>Throughout all of this, market sentiment has remained remarkably positive, helped no doubt by the Fed's 747's air dropping money from the sky in all directions. Sooner or later, this simply must come full circle. It may not be today, tomorrow or even next year, but at some point, things have to correct. The sad part being, the longer it continues this way, the worse the eventual reset will be.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1c39800b5dd4c2177253ad87d4bc9487\" tg-width=\"890\" tg-height=\"445\" width=\"100%\" height=\"auto\"><span>Source: www.currentmarketvaluation.com</span></p>\n<p>According to the Buffett indicator, which is a personal favorite of mine, we are, by a wide margin, the most overvalued we have ever been in modern history. By the above graph, we are nearly 30% above levels that were hit during the internet bubble.</p>\n<p>As I have stated in prior articles, none of this matters if the Buffett indicator does not hold any predictive qualities. Unfortunately for us, it has proven to be a remarkably accurate model in predicting subsequent 5yr S&P 500 returns.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/be2609040c3bd098b47c4fe273af4e18\" tg-width=\"889\" tg-height=\"445\" width=\"100%\" height=\"auto\"><span>Source: www.currentmarketvaluation.com</span></p>\n<p>So, what are you to do in a market such as this? My course of action is to begin to position myself into defensive and value names. Historically, value names outperform in periods of turmoil, which the Buffet indicator predicts we may be heading towards.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5604196e61442aeb2acea19f3ab19ba1\" tg-width=\"578\" tg-height=\"339\" width=\"100%\" height=\"auto\"><span>Source: FactSet</span></p>\n<p>Trying to time the market is by and large a fools game, so personally I have been slowly rotating into value throughout 2021. So far, I have been punished for this move to the tune of roughly 5% underperformance against the S&P 500's (SPY) 20.60% gain so far this year vs my 15.93%.</p>\n<p>By saying I am rotating into value, this does not mean abandoning growth all together. I am certainly not planning to sell all of my growth names and plan to hold onto my quite large positions in Netflix (NFLX), Microsoft (MSFT), Amazon (AMZN), NVIDIA (NVDA), Okta, Inc. (OKTA), Salesforce (CRM), Facebook (FB) and Alphabet (GOOGL) for the foreseeable future.</p>\n<p>What I have done to date is to sell out of and trim some of my more speculative growth names such as Alibaba (BABA), Tencent (OTCPK:TCEHY) and Illumina (ILMN) and rotate the proceeds into defensive names.</p>\n<p>Technology companies of today are not simply selling hopes and dreams as they were for a large part in the crash of 2000, instead, they have massive profits, huge cash positions and terrific profit margins, so while established tech names will certainly be sold off hard in a crash, it is highly unlikely that carnage on the scale of the 2000's will be inflicted or long lived.</p>\n<p>What I am doing is surrounding my growth positions with quality value stocks that are currently selling for very reasonable prices. In my main portfolio as of this evening, I have allocated 36.29% of my assets in defensive sectors such as consumer staples, healthcare, utilities and REITs.</p>\n<p>While many people may look at this allocation as a drag on returns, I view this as a safety net full of wonderful companies that pay large, secure dividends and are attractively priced currently. Below, I will share 5 of my defensive holdings that I am purchasing currently.</p>\n<p><b>Unilever</b></p>\n<p>This wonderful consumer staples behemoth has been thoroughly unloved for some time now and I think unfairly so, Unilever (UL) is full of iconic brands that are loved and sold throughout the world.</p>\n<p>Returns for the stock have been abysmal over the latest 5-year period even though the company has clearly made progress on numerous fronts such as trimming slower growth brands, supply chain and digital improvements along with leveraging its emerging market strength.</p>\n<p>The company to this day remains an insanely profitable enterprise with gross margins well above peers in the consumer staples sector even including the commodity inflation currently sweeping through the sector.</p>\n<p><img src=\"https://static.tigerbbs.com/e92c6135c002c41d9aa50e957b778b75\" tg-width=\"640\" tg-height=\"518\" width=\"100%\" height=\"auto\"></p>\n<p>The main beef the market seems to have lately is the decision to pull Ben & Jerry's ice cream from the disputed, Israeli settlements claimed by Palestine. In my opinion, this was a lose, lose situation for Unilever as the Ben & Jerry's brand has a long history of mixing politics with business and while the decision was to pull the product from only those specific settlements, the brand has now faced worldwide backlash for it.</p>\n<p>Threatened boycotts and political statements thankfully tend to have a very short shelf life and the result of this temporary drama is that Unilever is now on sale at a wonderful price.</p>\n<p>The company currently sells for a 17.49 forward PE ratio, well below the sector median of 21.81, in addition, shares currently offer a whopping 3.66% dividend yield with a 59% payout ratio, indicating ample coverage with room to grow.</p>\n<p><b>Gilead Sciences</b></p>\n<p>To stick with the theme of unloved gems, Gilead Sciences (GILD) represents a very underappreciated turnaround story in the defensive health care area. For many years now shareholders have been frustrated with the ever declining earnings of the Hep C franchise dragging down the valuation to the current rock bottom levels.</p>\n<p><img src=\"https://static.tigerbbs.com/58253ed118f9119172a482ab4e5fd402\" tg-width=\"640\" tg-height=\"587\" width=\"100%\" height=\"auto\"></p>\n<p>With shares trading hands at a 10 PE, you would think that growth would be the last thing on the horizon for the company, however you would be wrong. The Hep C burn off looks to be reaching a bottom and the company has completely revamped its clinical portfolio through multiple acquisitions, the most notable, the purchase of Immunomedics and its main asset, Trodelvy, which has shown vast potential beyond breast cancer and could become an oncology blockbuster franchise.</p>\n<p>Gilead also has a very promising cell therapy portfolio along with 47 clinical stage programs to complement its robust HIV franchise. At the current valuation and considering it pays a very well-covered 4.02% dividend, this is exactly the type of stock to consider if rough seas are expected in the market.</p>\n<p><b>General Mills</b></p>\n<p>If it is excitement you are looking for, then this recommendation is sure to disappoint, however General Mills (GIS), since the Blue Buffalo acquisition in 2018, has been executing very nicely.</p>\n<p>The company has taken measures to streamline what was a rather stale portfolio and transform into a more focused and profitable enterprise.</p>\n<p><img src=\"https://static.tigerbbs.com/e02f0a2881bacdc4576c0cbb5ab92b55\" tg-width=\"640\" tg-height=\"509\" width=\"100%\" height=\"auto\"></p>\n<p>General Mills was of course a huge beneficiary of the early at home trends of the COVID pandemic and while many of those trends seem to have stuck, the share price has been stubbornly stagnant.</p>\n<p>The company recently announced an aggressive strategy to combat rising input inflation which has been seen as a large reason for recent share declines. I conversely view input inflation, if temporary, as a huge positive for staples companies as the rising prices of the end product never seem to decline therefore making the price adjustments made in the current environment permanent, improving margins immensely when input costs eventually moderate.</p>\n<p>General Mills is valued as if they are a struggling company with a PE ratio of 15.64 compared to a sector median of 18.28, when in fact the company appears to be executing very well with management focusing significant efforts on brand building, ecommerce and cost reduction.</p>\n<p>With a cheap valuation, a well covered and now growing dividend of 3.49% and EPS expected to grow at 6-7% long term, this company is a no brainer to play defense with.</p>\n<p><b>W. P. Carey</b></p>\n<p>The real estate sector has long been thought of as a defensive space; however, currently it pays to cherry pick your holdings closely as the sector is rewarding housing, industrial and data centers with historically high valuations, while office, entertainment and retail remain beaten down from the pandemic.</p>\n<p>W. P. Carey (WPC) represents a diversified grouping of properties that is approximately 50% industrial, 20% office, 20% retail and 10% other. The company is geographically diversified as well with a long and successful history of operating overseas with 38.10% of rents are from international tenants.</p>\n<p>The valuation assigned to W. P. Carey certainly appears to be attractive compared to the sector as it is currently trading at a 24.84% discount.</p>\n<p><img src=\"https://static.tigerbbs.com/5f6142bc6273039e3a35b1137a71fb19\" tg-width=\"640\" tg-height=\"648\" width=\"100%\" height=\"auto\"></p>\n<p>This discount may be a bit misleading as W. P. Carey does tend to have a lower growth profile than others in the REIT space, however this is one of the highest quality company's you can buy with built in inflation protection covering the majority of its leases along with a rock-solid balance sheet.</p>\n<p>With a 5.57% dividend yield and a rather compelling valuation, I feel very secure in adding at these levels.</p>\n<p><b>Berkshire Hathaway</b></p>\n<p>Uncle Warren has built Berkshire Hathaway (BRK.B) (BRK.A) for times exactly like this, the oracle of Omaha has a massive cash balance ready to put to work. The disciplined nature of his approach throughout the pandemic has led to frustration among investors who feel he missed a big opportunity during the crash in 2020.</p>\n<p>The 2020 crash and the subsequent rapid rebound was one of the strangest experiences in some time and I am more than willing to give him a pass on it. As we now are entering firmly uncharted territory regarding overall valuations, Warren may yet get another shot to open the coffers.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/70a6af48a3cc3a0bf485c05c30ccf7ad\" tg-width=\"635\" tg-height=\"417\" width=\"100%\" height=\"auto\"><span>Data by YCharts</span></p>\n<p>Berkshire has rallied hard since 2020, however the stock is still very reasonably priced on a book value basis, so much so, that Warren's biggest purchase in the last year has been his own stock and I have been buying right there with him.</p>\n<p>Berkshire is built to be a doomsday survival machine, ready to take advantage of any market turmoil and to come out the other side stronger than it came in. I look at Berkshire shares as an insurance policy on my portfolio as the company benefited massively from purchases made in both the 2000 tech crash and the 2008 financial crisis.</p>\n<p>Having nearly 25% of its market cap in cash, along with the quality business's Berkshire owns, consistently adding to that cash balance, makes adding shares at the current level a very easy decision.</p>\n<p><b>Conclusion</b></p>\n<p>I am not smart enough, nor foolish enough to know exactly when valuations will correct, I just know that they will, eventually. Buying high quality companies at reasonable valuations is never a bad decision and while my returns may temporarily suffer as the markets continue to rocket higher leaving value stocks by the wayside, I can sleep a bit better knowing that well over a third of my main portfolio is reasonably protected from disaster.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Getting Nervous? 5 Defensive Equities To Consider</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nGetting Nervous? 5 Defensive Equities To Consider\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-09-13 20:24 GMT+8 <a href=https://seekingalpha.com/article/4454865-getting-nervous-5-defensive-equities-to-consider><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nMarkets, specifically growth names, have continued to power higher this Summer, defying gravity yet again. At some point, value names simply must make a comeback.\nI am gradually positioning ...</p>\n\n<a href=\"https://seekingalpha.com/article/4454865-getting-nervous-5-defensive-equities-to-consider\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BRK.B":"伯克希尔B","WPC":"W. P. Carey Inc","UN":"联合利华(荷兰)","GILD":"吉利德科学","BRK.A":"伯克希尔","UL":"联合利华(英国)","GIS":"通用磨坊"},"source_url":"https://seekingalpha.com/article/4454865-getting-nervous-5-defensive-equities-to-consider","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1132668749","content_text":"Summary\n\nMarkets, specifically growth names, have continued to power higher this Summer, defying gravity yet again. At some point, value names simply must make a comeback.\nI am gradually positioning my portfolio towards value and defensive names. This may not be trendy, however, capital preservation I feel is appropriate given the levels at which we currently reside.\nI offer 5 defensive names that can be purchased at attractive prices currently.\n\nColin Anderson Productions pty ltd/DigitalVision via Getty Images\nI do not know about you, but I am a bit nervous. The markets are hitting all-time highs left and right and it would seem if you have been simply throwing darts anywhere in the tech space, you are likely up big.\nFor some reason, I tend to be the most anxious when things are going a bit too good and the past couple of years have put me into this headspace currently. In this article I would like to offer 5 defensive value names to consider for your portfolio.\nOverview\nIn my wildest dreams, I did not think that the stock market would reach these heights so quickly after COVID-19 burst onto the scene. Quite a bit of trauma has been inflicted on our economy in the last 2 years, from the initial shutdown and supply chain disruption, to the digital transition many businesses had to navigate just to stay solvent, to the vast and unexpected worker shortage currently facing the country and last but not least, the rather worrying inflation trends currently percolating across supply chains.\nThroughout all of this, market sentiment has remained remarkably positive, helped no doubt by the Fed's 747's air dropping money from the sky in all directions. Sooner or later, this simply must come full circle. It may not be today, tomorrow or even next year, but at some point, things have to correct. The sad part being, the longer it continues this way, the worse the eventual reset will be.\nSource: www.currentmarketvaluation.com\nAccording to the Buffett indicator, which is a personal favorite of mine, we are, by a wide margin, the most overvalued we have ever been in modern history. By the above graph, we are nearly 30% above levels that were hit during the internet bubble.\nAs I have stated in prior articles, none of this matters if the Buffett indicator does not hold any predictive qualities. Unfortunately for us, it has proven to be a remarkably accurate model in predicting subsequent 5yr S&P 500 returns.\nSource: www.currentmarketvaluation.com\nSo, what are you to do in a market such as this? My course of action is to begin to position myself into defensive and value names. Historically, value names outperform in periods of turmoil, which the Buffet indicator predicts we may be heading towards.\nSource: FactSet\nTrying to time the market is by and large a fools game, so personally I have been slowly rotating into value throughout 2021. So far, I have been punished for this move to the tune of roughly 5% underperformance against the S&P 500's (SPY) 20.60% gain so far this year vs my 15.93%.\nBy saying I am rotating into value, this does not mean abandoning growth all together. I am certainly not planning to sell all of my growth names and plan to hold onto my quite large positions in Netflix (NFLX), Microsoft (MSFT), Amazon (AMZN), NVIDIA (NVDA), Okta, Inc. (OKTA), Salesforce (CRM), Facebook (FB) and Alphabet (GOOGL) for the foreseeable future.\nWhat I have done to date is to sell out of and trim some of my more speculative growth names such as Alibaba (BABA), Tencent (OTCPK:TCEHY) and Illumina (ILMN) and rotate the proceeds into defensive names.\nTechnology companies of today are not simply selling hopes and dreams as they were for a large part in the crash of 2000, instead, they have massive profits, huge cash positions and terrific profit margins, so while established tech names will certainly be sold off hard in a crash, it is highly unlikely that carnage on the scale of the 2000's will be inflicted or long lived.\nWhat I am doing is surrounding my growth positions with quality value stocks that are currently selling for very reasonable prices. In my main portfolio as of this evening, I have allocated 36.29% of my assets in defensive sectors such as consumer staples, healthcare, utilities and REITs.\nWhile many people may look at this allocation as a drag on returns, I view this as a safety net full of wonderful companies that pay large, secure dividends and are attractively priced currently. Below, I will share 5 of my defensive holdings that I am purchasing currently.\nUnilever\nThis wonderful consumer staples behemoth has been thoroughly unloved for some time now and I think unfairly so, Unilever (UL) is full of iconic brands that are loved and sold throughout the world.\nReturns for the stock have been abysmal over the latest 5-year period even though the company has clearly made progress on numerous fronts such as trimming slower growth brands, supply chain and digital improvements along with leveraging its emerging market strength.\nThe company to this day remains an insanely profitable enterprise with gross margins well above peers in the consumer staples sector even including the commodity inflation currently sweeping through the sector.\n\nThe main beef the market seems to have lately is the decision to pull Ben & Jerry's ice cream from the disputed, Israeli settlements claimed by Palestine. In my opinion, this was a lose, lose situation for Unilever as the Ben & Jerry's brand has a long history of mixing politics with business and while the decision was to pull the product from only those specific settlements, the brand has now faced worldwide backlash for it.\nThreatened boycotts and political statements thankfully tend to have a very short shelf life and the result of this temporary drama is that Unilever is now on sale at a wonderful price.\nThe company currently sells for a 17.49 forward PE ratio, well below the sector median of 21.81, in addition, shares currently offer a whopping 3.66% dividend yield with a 59% payout ratio, indicating ample coverage with room to grow.\nGilead Sciences\nTo stick with the theme of unloved gems, Gilead Sciences (GILD) represents a very underappreciated turnaround story in the defensive health care area. For many years now shareholders have been frustrated with the ever declining earnings of the Hep C franchise dragging down the valuation to the current rock bottom levels.\n\nWith shares trading hands at a 10 PE, you would think that growth would be the last thing on the horizon for the company, however you would be wrong. The Hep C burn off looks to be reaching a bottom and the company has completely revamped its clinical portfolio through multiple acquisitions, the most notable, the purchase of Immunomedics and its main asset, Trodelvy, which has shown vast potential beyond breast cancer and could become an oncology blockbuster franchise.\nGilead also has a very promising cell therapy portfolio along with 47 clinical stage programs to complement its robust HIV franchise. At the current valuation and considering it pays a very well-covered 4.02% dividend, this is exactly the type of stock to consider if rough seas are expected in the market.\nGeneral Mills\nIf it is excitement you are looking for, then this recommendation is sure to disappoint, however General Mills (GIS), since the Blue Buffalo acquisition in 2018, has been executing very nicely.\nThe company has taken measures to streamline what was a rather stale portfolio and transform into a more focused and profitable enterprise.\n\nGeneral Mills was of course a huge beneficiary of the early at home trends of the COVID pandemic and while many of those trends seem to have stuck, the share price has been stubbornly stagnant.\nThe company recently announced an aggressive strategy to combat rising input inflation which has been seen as a large reason for recent share declines. I conversely view input inflation, if temporary, as a huge positive for staples companies as the rising prices of the end product never seem to decline therefore making the price adjustments made in the current environment permanent, improving margins immensely when input costs eventually moderate.\nGeneral Mills is valued as if they are a struggling company with a PE ratio of 15.64 compared to a sector median of 18.28, when in fact the company appears to be executing very well with management focusing significant efforts on brand building, ecommerce and cost reduction.\nWith a cheap valuation, a well covered and now growing dividend of 3.49% and EPS expected to grow at 6-7% long term, this company is a no brainer to play defense with.\nW. P. Carey\nThe real estate sector has long been thought of as a defensive space; however, currently it pays to cherry pick your holdings closely as the sector is rewarding housing, industrial and data centers with historically high valuations, while office, entertainment and retail remain beaten down from the pandemic.\nW. P. Carey (WPC) represents a diversified grouping of properties that is approximately 50% industrial, 20% office, 20% retail and 10% other. The company is geographically diversified as well with a long and successful history of operating overseas with 38.10% of rents are from international tenants.\nThe valuation assigned to W. P. Carey certainly appears to be attractive compared to the sector as it is currently trading at a 24.84% discount.\n\nThis discount may be a bit misleading as W. P. Carey does tend to have a lower growth profile than others in the REIT space, however this is one of the highest quality company's you can buy with built in inflation protection covering the majority of its leases along with a rock-solid balance sheet.\nWith a 5.57% dividend yield and a rather compelling valuation, I feel very secure in adding at these levels.\nBerkshire Hathaway\nUncle Warren has built Berkshire Hathaway (BRK.B) (BRK.A) for times exactly like this, the oracle of Omaha has a massive cash balance ready to put to work. The disciplined nature of his approach throughout the pandemic has led to frustration among investors who feel he missed a big opportunity during the crash in 2020.\nThe 2020 crash and the subsequent rapid rebound was one of the strangest experiences in some time and I am more than willing to give him a pass on it. As we now are entering firmly uncharted territory regarding overall valuations, Warren may yet get another shot to open the coffers.\nData by YCharts\nBerkshire has rallied hard since 2020, however the stock is still very reasonably priced on a book value basis, so much so, that Warren's biggest purchase in the last year has been his own stock and I have been buying right there with him.\nBerkshire is built to be a doomsday survival machine, ready to take advantage of any market turmoil and to come out the other side stronger than it came in. I look at Berkshire shares as an insurance policy on my portfolio as the company benefited massively from purchases made in both the 2000 tech crash and the 2008 financial crisis.\nHaving nearly 25% of its market cap in cash, along with the quality business's Berkshire owns, consistently adding to that cash balance, makes adding shares at the current level a very easy decision.\nConclusion\nI am not smart enough, nor foolish enough to know exactly when valuations will correct, I just know that they will, eventually. Buying high quality companies at reasonable valuations is never a bad decision and while my returns may temporarily suffer as the markets continue to rocket higher leaving value stocks by the wayside, I can sleep a bit better knowing that well over a third of my main portfolio is reasonably protected from disaster.","news_type":1},"isVote":1,"tweetType":1,"viewCount":20,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":19,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/886034201"}
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