Sketching + Starting Over

Sorry for the two month writing layoff, but I had some family issues to work through.

Year end is always a good time to make some changes. Below is a sketch of the portfolio that I want to move toward. I will start over with some industry reviews. The new portfolio will expand slightly to either 30 or 33 companies.

I think I want to move toward a more mid-cap/small cap portfolio. It is too easy to “hideout” in the Sysco’s and Restaurant Brand’s type names and not make tough decisions on smaller companies.

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My new rule is going to be no more than 20% big cap stocks. I am using the $20 billion cutoff as my definition of “big cap”.

All of the good mid-cap mutual funds have 10% to 30% larger cap stocks.

The six stocks below are my favorite big caps in order:

1. Nutrien - NTR

2. Kinder Morgan - KMI

3. Steel Dynamics - STLD

4. Tyson - TSN

5. Corteva - CRTA

6. Devon - DVN

I will try to find some smaller cap replacements, but in certain industries that is difficult.

This means trying to find better ideas than Pepsi, Halliburton, Sysco, Restaurant Brands, Royal Gold, and Teck.

Years ago I was given a plaque of two vultures sitting on a fence with inscription:

“the hell with patience, I am going to go kill something”

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These 9 stocks are my best ideas from the previous portfolio ranked in order:

1. RXO - RXO

2. Brunswick - BC

3. Red Rock - RRR

4. Middleby - MIDD

5. Nexstar - NXST

6. AGCO - AGCO

7. Darling - DAR

8. Matador - MDTR

9. Gentex - GNTX

I am punting on Iridium, HF Sinclair, and Thor.

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These are the 15 stocks I am adding, but will reexamine during the first quarter.

This a group of aggressive stocks. No more defense. Let’s ignore the over-valuation of tech and “mo” stocks and believe that small caps are at worst fairly priced. Let’s believe that “pro-growth” policies will work, and the Republicans will win the mid-terms. The cautious approach has not worked well, let’s try “all-in”.

1. Columbia Sportswear - COLM

2. Pursuit - PRSU

3. Core & Main - CNM

4. Saia - SAIA

5. Willscot - WSC

6. Scott’s Miracle-Gro - SMG

7. Lineage - LINE

8. Norwegian Cruise -NCLH

9. Avantor - AVTR

10. Helmerich & Payne - HP

11. Alamos Gold - ALG

12. First Watch - FWRG

13. Polaris - PII

14. Cubesmart - CUBE

15. Host Hotels - HST

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These are my 50 favorite ideas knocking of the door of the portfolio. Most need more work, or a cheaper stock price.

1. Lucky Strike - LUCK

2. Flowers - FLO

3. Vail - MTN

4. Etsy - ETSY

5. Hudbay Minerals - HBM

6. Stepan - SCL

7. Starbulk - SBLK

8. Oxford Industries - OXM

9. DuPont - DD

10. Celanese - CE

11. SunOpta - STLK

12. Coty COTY

13. Portillo’s - PTLO

14. Magnite

15. Moelis

16. MGP Ingredients

17. Atlas Energy

18. Entegris - ENTG

19. LyondellBasell

20. Astrana Health

21. LKQ

22. Carmax

23. Constellation Brands - STZ

24. Rogers - ROG

25. Primo Brands

26. Mohawk

27. Pulte

28. Zebra

29. Wynn Resorts

30. Clorox

31. Revvity -

32. Kyndryl - KD

33. Alaska Air - ALK

34. Sensata - ST

35. Knife River - KNF

36. Whirlpool - WHR

37. Ashland - ASH

38. Trinity - TRN

39. Huntsman - HUN

40. John Wiley - WLY

41. Arhaus -

42. Neogen -

43. Ziff-Davis - ZD

44. Thor -

45. Hasbro

46. Arthur Gallagher

47. Wendy’s

48. Leggett & Platt

49. Wabash National

50. Iridium