Abnormal Returns is on a week-long break this week. That does not mean that we are content-free. As we did last year we asked a panel of independent bloggers a series of questions. This year we crowdsourced the questions from readers who won a copy of the Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere for their efforts. We hope you enjoy these posts. Feel free to chime in with your own answers in the comments.
Check out the answers to yesterday’s question: What piece of wisdom or advice do you most wish you had ignored?
What asset (stock, fund, etc.) would you feel most comfortable buying and holding for the next ten years? (submitted by Anonymous)
Answers in order of response (first to last):
Phil Pearlman (Phil Pearman): $SDY, the SPDR S&P Dividend ETF.
Steven Place (InvestingWithOptions): The TVIX. Kidding, of course. The only asset I’m comfortable holding and building is my own LLC. Trends, bubbles, and crashes come and go– but I know regardless of what happens I can still create my own value in any market.
Bob Seawright (Above the Market): For a ten-year lock-up I’d be most comfortable being a Baupost Group “partner” (investor).
Robert Sinn (The Stock Sage): US small cap equities ($IWM) and/or junior gold miners ($GDXJ)
Todd Sullivan (Value Plays): AIG ($AIG) (shares, warrants). The #1 global insurer right now at a dirt cheap valuation. People will always need insurance and dethroning them not likely due to costs to do so. Their major risk in management, so market or even war/terrorism (not covered). As long as management is competent (CEO bench staffed), they will provided nice safe returns to investors.
Ivan Hoff, (Ivanhoff Capital): I am not a long-term investor per se.10 years is an eternity and a lot of price cycles will change over that period of time. Nevertheless, for the purposes of this exercise I would go with Visa ($V) or Mastercard ($MA). They have so many catalysts going for them – rising online sales, digital wallets, emerging markets and are part of the S&P 500 which will likely do well too.
Roger Nusbaum (Random Roger): While I am not sure how broad or narrow the question is, certainly equities over fixed income and foreign over domestic. Being a little more specific the countries I prefer (in no particular order) would be Norway, Australia, Brazil, Colombia, Denmark, Sweden, Finland (only if the eurozone breaks up), Israel, Chile and China.
Jay (MarketFolly): Unconventional answer: Invest in yourself. That’s one “asset class” you have the most control over.
Kid Dynamite (Kid Dynamite’s World): If you put a gun to my head, I’d say $SPY. Otherwise, I’d decline to answer. Or maybe I’d say “cash.”
Jared Woodard (Condor Options): Whenever someone launches a put-write ETF: that.
Tom Brakke (the research puzzle): Short prime Upper Midwest farmland versus 3-month T-bills (if there was a way to do it cheaply).
Interloper (The Real Interloper): I’m going to wimp out and call a tie – a HK staples company called Hengan (benefit from Chinese consumption) and SAB Miller as a gateway to future African economic growth (they also own 50% of 2nd most popular Chinese beer brand, again consumption/standard of living play). Side note: tempted to pick Monsanto or a mobile bandwidth play here.
Rob (TechInsidr): NASDAQ index.
CJ (Crackerjack Finance): Stocks – in global growth sectors. Top picks: Coach ($COH), Apple ($AAPL)
Toby Carlisle (Greenbackd): I’ve done a great deal of research seeking to answer that question, and the answer is the global deep value strategy employed by the Eyquem Fund, which is the fund I manage. I hate to talk my book, but I can’t honestly give any other answer.
DH (Dynamic Hedge): For long-term investors a risk parity or dynamic risk parity approach is usually best. Shout-out to Ray Dalio. Shout-out to Meb Faber. I’m a bull for US equities in the next 10-years. The next 3-4 years might be a rough ride, but stocks are going up.
Walter (Sober Look): S&P500 – as crazy as that may sound.
Sean McLaughlin (The Minimalist Trader): A house, fully paid for.
Eddy Elfeinbein (Crossing Wall Street): AFLAC ($AFL) and Ford ($F).
Gary Evans (Global Macro Monitor): A portfolio that is short 10-year JGB’s in yen at 0.85% and the US T-Bond at 1.63% and long a basket of transformative tech stocks, such as Apple, 3D Systems, etc. The portfolio would also include equity in the team that wins the Qualcomm Tricorder X Prize, which awards $10 million to the group/companies that develops a portable, wireless device the size of an iPhone, to monitor and diagnoses personal health conditions.
David Merkel (Aleph Blog): Reinsurance Group of America [$RGA]. Part of a stable 5-company oligopoly for life reinsurance. Well-run. Trades at 63% of book, and 6.6x next year’s earnings. Earnings grows at 8-12%/year. Not as interest-rate sensitive as other life insurers; earnings comes predominantly from mortality. FD: Long RGA
Josh Brown (The Reformed Broker): $DEM, WisdomTree Emerging Markets Dividend Fund. Call in ten years, this will outperform them all. This is not economics, it’s science.
Eric Falkenstein (Falkenblog): World-wide low-vol equity fund.
Jeff Miller (A Dash of Insight): I do not embrace a ten-year time frame, but I’ll play along. Stocks over bonds. Biotech as the best sector.
Mick Weinstein (Covestor): Israeli real estate.
Brian Lund (bclund): I would be very comfortable holding an income producing, multi-unit rental property, in an area that has a net influx of population. Traditionally that is they way to make money in real estate, not “flipping” houses, and there is something to be said for an investment that you can actually touch during uncertain economic times.
Tim (The Psy-Fi Blog): I don’t normally make predictions, especially over a period as short as a decade. However … demographic trends and financial repression (the need for governments to maintain a supply of coerced purchasers of their bonds) suggest that developed market equities won’t be a great investment class for the next ten years or so. If I have to be forced into a prediction then I’d look at agriculture and associated by-products: populations are increasing, wealth is slowly equalizing and diets are improving across the planet. Figuring out how to meet the demand for food, and especially protein, is a challenge and an opportunity.
Jeff Carter (Points and Figures): $SPY.
Eric Swarts (Market Anthropology): U.S. Equities.
Thanks to all the bloggers for their participation. This is the last installment in this series. Stay tuned for our answers next week.