I follow a two pronged approach. The first is a boring Ben Graham-esque value that utilizes an asset allocation model. This side of my portfolio is pretty stable. I generally try to buy solid companies that have been beat up for no good reason and offer a good or growing dividend.
On the other side, I play with what I call "disruptive events". You're looking to find things that really bump the needle. This is where I am hunting for companies that will do things like spinoffs, M&A activity, obtain FDA permission on experimental products, lawsuits, etc. I also look for opportunity in higher volatility areas (mining, biotech) where you tend to see bigger bumps.
Funny, I do the same general idea but with Harry Browne's permanent portfolio for the core and primarily sector investment for the speculation. This is my current main body with approximate YTD returns (I didn't sum up the dividends yet so it is a bit higher).
Permanent Portfolio (Overall +8.3%)
Gold: SGOL +19.8% @ 25% of PP
Cash: VFISX +0.9% @ 25% of PP
Equity: VTSAX +4.3% @ 22.5% of PP
VGTSX +2.8% @ 2.5% of PP
Bond: US Trea. Coupon +8.5% @ 25% of PP
So if trends continue this will turn out to be a pretty typical +10% year for the PP.
In speculations I added the following this year:
Robotics ROBO +13.8% (We've covered this topic in previous threads...any raise in minimum wage is going to shoot this up)
Platinum: PPLT +8.1% (added mid-year...ratio vs. gold is crazy and will be very susceptible to spikes with increase in fuel prices and strikes)
Gen X: PLAY +20.1% (Generation X has become the primary holders of wealth and they are recollecting items from childhood)
Cyber Sec: HACK +1.9% (This isn't going away any time soon)
If Cllinton wins the presidency ROBO, PPLT, and HACK may have good rises. She will try to do something with minimum wages which will just shoot automation forward. Without a doubt she will push for higher energy costs which will drive precious metals mining costs very high. And with all the email hacks releasing information on her self dealing is there any doubt she is going to pour tons of money into cyber security companies?
I also think the Gen X trends will continue as people will want to escape from the real world under either Clinton or Trump. We have seen Disney nearly triple in price driven by Marvel Comics and Star Wars. But there are still a lot of other iconic brands which are just now getting promoted. If HASBRO does another short term dip that might be a good pickup. Brands like Dungeons and Dragons and Magic the Gathering are showing signs of life. The only reason they haven't shot up dramatically is the management at Wizards of the Coast is dreadful, alienating their core targets via a bunch of social justice nonsense. I just fear that WoTC will do the same thing Sony did with Ghostbusters and just decimate the franchise. It looks like they lost about $100 million on the failed reboot.
Right now I am trying to find good (i.e. pure play) ways to invest in AI and voice interaction. Again, these will have big boosts with minimum wage hikes. Anyone have suggestions?
