Great companies, lousy stocks
TweetFollow Us on Twitter

Great companies, lousy stocks

By Bill Gunderson
of Gunderson Capital Management (http://www.PWstreet.com)

I’m selling my book on-line. Thanks to Google AdWords, they are flying through cyberspace.

Does that mean I am telling my clients to rush out and buy Google?

Not a chance.

Johnson & Johnson make some of the most trusted health care products in the world. Surely there is room in my list of 157 Best Stocks Now for such an important part of our national life. No. Not if you want to make money.

I’m using Microsoft products to write, send and read this article. Don’t even think about putting this in your portfolio.

These are all good companies. Great companies. But lousy stocks. Let’s see why.

When Google went public seven years ago, it made a lot of people a lot of money. When the company founders told Wall Street analysts they were not going to play the quarterly earnings game, and instead invest in new things that sometimes made money but were always interesting, investors scoffed.

They are still scoffing. After a recent conference call with company officials, Google investors complained that expenses were too high, profits were too low, and Google was throwing too much money around at too many things. Like wind mill farms, for example.

Google recently invested $100 million in an Oregon wind power project, and that is on top of wind investments in North Dakota, and the East Coast.

I am sure these projects are a lot of fun. But I am also sure that investing in Green Energy is a lousy idea -- if your objective is making money.

Over the last three years, Google’s stock has returned zero to investors. That is awful. Some of the best know professional investors in America are waiting -- hoping -- for Google to change. And they call that an investment strategy?

Same with Johnson & Johnson. For all I know this company is saving the universe. But I am sure it is killing a lot of portfolios because it is a darling of the big investment firms that love to put it in their clients’ portfolios.

Over the last three years, Johnson & Johnson has returned 5% to investors. If I owned that stock, that would make me ill.

The list goes on and on. If your portfolio is full of the stocks that have run you into the ground for years, and you are holding them because of their latest announcement that is going to turn everything around, good luck with that.

Because that is what you are counting on: Luck. That is not investing. That is gambling. Prospects are not profits.

For the last five years, analysts have been saying Apple is at the end of its lucky streak. But they just keep doing great things, the greatest is making money for its investors.

That is unlikely to change any time soon.

If you want to see an unfashionable company, you may not find it if you do not spend a lot of time in the lower-middle class warehouse districts. But that is where you will have to go to see one of my favorite stocks: CSX. It is a railroad. And it carries everything everywhere it goes.

I carry it in my portfolios because it delivers profits to shareholders. And looks like it will for a while. When it stops doing that, so will I.

Over the last five years, it has returned 19% percent per year.

Here’s a company I do not use, but probably should: It has been one of the greatest performing stocks of the decade: Priceline.

Surprised? Don’t be. It’s all in the numbers. Over the last ten years, Priceline has returned 84% per year over the last five years.

There are lots more out there: Netflix is a great stock too, averaging 50% per year over the last five years.

It is tempting to call this numbers-crunching -- and on some levels it is. But more than that, the profits are the best way to measure the performance of the people who run the company.

It is the best way to watch what they do. And not what they say.

And that is the best way to start picking your best stocks now.

 
AAPL
$102.50
Apple Inc.
+0.25
MSFT
$45.43
Microsoft Corpora
+0.55
GOOG
$571.60
Google Inc.
+2.40

MacTech Search:
Community Search:

Software Updates via MacUpdate

Skype 6.19.0.450 - Voice-over-internet p...
Skype allows you to talk to friends, family and co-workers across the Internet without the inconvenience of long distance telephone charges. Using peer-to-peer data transmission technology, Skype... Read more
VueScan 9.4.41 - Scanner software with a...
VueScan is a scanning program that works with most high-quality flatbed and film scanners to produce scans that have excellent color fidelity and color balance. VueScan is easy to use, and has... Read more
Cloud 3.0.0 - File sharing from your men...
Cloud is simple file sharing for the Mac. Drag a file from your Mac to the CloudApp icon in the menubar and we take care of the rest. A link to the file will automatically be copied to your clipboard... Read more
LibreOffice 4.3.1.2 - Free Open Source o...
LibreOffice is an office suite (word processor, spreadsheet, presentations, drawing tool) compatible with other major office suites. The Document Foundation is coordinating development and... Read more
SlingPlayer Plugin 3.3.20.505 - Browser...
SlingPlayer is the screen interface software that works hand-in-hand with the hardware inside the Slingbox to make your TV viewing experience just like that at home. It features an array of... Read more
Get Lyrical 3.8 - Auto-magically adds ly...
Get Lyrical auto-magically add lyrics to songs in iTunes. You can choose either a selection of tracks, or the current track. Or turn on "Active Tagging" to get lyrics for songs as you play them.... Read more
Viber 4.2.2 - Send messages and make cal...
Viber lets you send free messages and make free calls to other Viber users, on any device and network, in any country! Viber syncs your contacts, messages and call history with your mobile device,... Read more
Cocktail 7.6 - General maintenance and o...
Cocktail is a general purpose utility for OS X that lets you clean, repair and optimize your Mac. It is a powerful digital toolset that helps hundreds of thousands of Mac users around the world get... Read more
LaunchBar 6.1 - Powerful file/URL/email...
LaunchBar is an award-winning productivity utility that offers an amazingly intuitive and efficient way to search and access any kind of information stored on your computer or on the Web. It provides... Read more
Maya 2015 - Professional 3D modeling and...
Maya is an award-winning software and powerful, integrated 3D modeling, animation, visual effects, and rendering solution. Because Maya is based on an open architecture, all your work can be scripted... Read more

Latest Forum Discussions

See All

Rhonna Designs Magic (Photography)
Rhonna Designs Magic 1.0 Device: iOS Universal Category: Photography Price: $1.99, Version: 1.0 (iTunes) Description: Want to sprinkle *magic* on your photos? With RD Magic, you can add colors, filters, light leaks, bokeh, edges,... | Read more »
This Week at 148Apps: August 25-29, 2014
Shiny Happy App Reviews   | Read more »
Qube Kingdom – Tips, Tricks, Strategies,...
Qube Kingdom is a tower defense game from DeNA. You rally your troops – magicians, archers, knights, barbarians, and others – and fight against an evil menace looking to dominate your kingdom of tiny squares. Planning a war isn’t easy, so here are a... | Read more »
Qube Kingdom Review
Qube Kingdom Review By Nadia Oxford on August 29th, 2014 Our Rating: :: KIND OF A SQUARE KINGDOMUniversal App - Designed for iPhone and iPad Qube Kingdom has cute visuals, but it’s a pretty basic tower defense game at heart.   | Read more »
Fire in the Hole Review
Fire in the Hole Review By Rob Thomas on August 29th, 2014 Our Rating: :: WALK THE PLANKUniversal App - Designed for iPhone and iPad Seafoam’s Fire in the Hole looks like a bright, 8-bit throwback, but there’s not enough booty to... | Read more »
Alien Creeps TD is Now Available Worldwi...
Alien Creeps TD is Now Available Worldwide Posted by Ellis Spice on August 29th, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »
Dodo Master Review
Dodo Master Review By Jordan Minor on August 29th, 2014 Our Rating: :: NEST EGGiPad Only App - Designed for the iPad Dodo Master is tough but fair, and that’s what makes it a joy to play.   | Read more »
Motorsport Manager Review
Motorsport Manager Review By Lee Hamlet on August 29th, 2014 Our Rating: :: MARVELOUS MANAGEMENTUniversal App - Designed for iPhone and iPad Despite its depth and sense of tactical freedom, Motorsport Manager is one of the most... | Read more »
Motorsport Manager – Beginner Tips, Tric...
The world of Motorsport management can be an unforgiving and merciless one, so to help with some of the stress that comes with running a successful race team, here are a few hints and tips to leave your opponents in the dust. | Read more »
CalPal Update Brings the App to 2.0, Add...
CalPal Update Brings the App to 2.0, Adds Lots of New Stuff Posted by Ellis Spice on August 29th, 2014 [ permalink ] | Read more »

Price Scanner via MacPrices.net

Save $50 on the 2.5GHz Mac mini, on sale for...
B&H Photo has the 2.5GHz Mac mini on sale for $549.99 including free shipping. That’s $50 off MSRP, and B&H will also include a free copy of Parallels Desktop software. NY sales tax only. Read more
Save up to $300 on an iMac with Apple refurbi...
The Apple Store has Apple Certified Refurbished iMacs available for up to $300 off the cost of new models. Apple’s one-year warranty is standard, and shipping is free. These are the best prices on... Read more
The Rise of Phablets
Carlisle & Gallagher Consulting Group, a businesses and technology consulting firm focused solely on the financial services industry, has released an infographic depicting the convergence of... Read more
Bad Driver Database App Allows Good Drivers t...
Bad Driver Database 1.4 by Facile Group is a new iOS and Android app that lets users instantly input and see how many times a careless, reckless or just plain stupid driver has been added to the... Read more
Eddy – Cloud Music Player for iPhone/iPad Fre...
Ukraine based CapableBits announces the release of Eddy, its tiny, but smart and powerful cloud music player for iPhone and iPad that allows users to stream or download music directly from cloud... Read more
A&D Medical Launches Its WellnessConnecte...
For consumers and the healthcare providers and loved ones who care for them, A&D Medical, a leader in connected health and biometric measurement devices and services, has launched its... Read more
Anand Lal Shimpi Retires From AnandTech
Anand Lal Shimpi, whose AnandTech Website is famous for its meticulously detailed and thoroughgoing reviews and analysis, is packing it in. Lal Shimpi, who founded the tech site at age 14 in 1997,... Read more
2.5GHz Mac mini, Apple refurbished, in stock...
The Apple Store has Apple Certified Refurbished 2.5GHz Mac minis available for $509, $90 off MSRP. Apple’s one-year warranty is included, and shipping is free. Read more
13-inch 2.5GHz MacBook Pro on sale for $999,...
B&H Photo has the 13″ 2.5GHz MacBook Pro on sale for $999.99 including free shipping plus NY sales tax only. Their price is $100 off MSRP. Read more
Labor Day Weekend MacBook Pro sale; 15-inch m...
B&H Photo has the new 2014 15″ Retina MacBook Pros on sale for up to $125 off MSRP. Shipping is free, and B&H charges NY sales tax only. They’ll also include free copies of Parallels Desktop... Read more

Jobs Board

*Apple* Retail - Multiple Positions (US) - A...
Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, you're also the Read more
*Apple* Retail - Multiple Positions (US) - A...
Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, you're also the Read more
*Apple* Retail - Multiple Positions (US) - A...
Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, you're also the Read more
*Apple* Retail - Multiple Positions (US) - A...
Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, you're also the Read more
Senior Event Manager, *Apple* Retail Market...
…This senior level position is responsible for leading and imagining the Apple Retail Team's global event strategy. Delivering an overarching brand story; in-store, Read more
All contents are Copyright 1984-2011 by Xplain Corporation. All rights reserved. Theme designed by Icreon.