The "Bull" Necessities
Three stocks with a 19% annual return? Count me in!
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VALUABLE INFORMATION
Down below, I have provided a dive into a three-stock portfolio that has returned 19% annualized beating the market by 12%. Typically this would only be for paying subscribers, however, I am so excited to tell you all about IMKTA, WMS, and BRT stocks I have decided to offer a free trial so you can check out these incredible performers.
This article is a DEEP dive into three markets I find very valuable. You’ll find out why below, but I wanted this article to serve as an appetizer for what is to come.
What You’ll Find Below:
‘It’s A Free Country, Not A Rent-Free Country’
Investing in real estate
“Gatorade Not Only Quenches Your Thirst Better, It Tastes Better Too”
Investing in water
“You Gonna Eat Your Tots?”
Investing in food
The “Bull” Necessities
A 19% annualized stock portfolio
BRT
WMS
IMKTA
SKIP TO THE STOCK ANALYSIS BY CLICKING HERE
There are three things you need to live in this world:
Food. Water. Shelter.
Yes, it sounds incredibly simplistic — as far as I remember, I knew that from the day I was born. Well, I don’t know what happened between day 1 and when we all began investing, but I think we forgot about our basic needs.
While we all love investing in tech — thanks to the media for talking about it non-stop — we seem to have forgotten about investing in our basic needs. That’s right, I invest in companies Jim Cramer doesn’t shout about 24/7.
Let’s take a look at the wealth that investing in basic needs has created. I start us off with the easiest of the three, shelter.
“It’s A Free Country, Not A Rent-Free Country”
It’s no secret that ‘shelter’ investing — known to normal people as real estate investing — is one of the most profitable and valuable ventures for all investors. Plus, it feels like the options are endless, whether you are buying physical real estate, REITs (real estate investment trusts), or investing through crowdfunding companies like Fundrise.
REITs have outperformed the S&P 500 in multiple ways over the past half-century. Only recently has the stock market begun to perform better. The good news for RE investors is that REITs have outperformed stocks over the long term.
BUT… this shouldn’t be surprising at all! Real estate is a necessity!
Why wouldn’t it be one of the highest-performing investments? I believe you have to be in real estate for the long term. Real estate has a limited supply with unlimited demand! We all know that there is a limited land supply, and as the world population grows, the only direction the price can go is… you guessed it, up!
This is the thesis of my writing today. High conviction buys driven by necessity with an infinite demand.
“Gatorade Not Only Quenches Your Thirst Better, It Tastes Better Too”
And thanks to Bobby Boucher for this one.
It’s not very often you get to hear someone tell you about investing in water. That might be because the investment thesis is so simple, or maybe we just haven’t figured it out yet. NEWS FLASH: there is only so much reliable drinking water in the world, and that water becomes more and more valuable every day.
There is a reason, however, that water is more valuable than the dollar bottled water you buy at the gas station. Around 80% of the water drawn in the US is used to cool electric power plants and irrigation. Basically, water helps keep your lights on and puts food in your belly.
Still not convinced? Good, I have even more for you. Recent studies have shown that
The global urban population facing water scarcity is projected to double from 930 million in 2016 to 1.7–2.4 billion people in 2050.
What does this mean? It means water demand is going to grow exponentially over the next couple of years. Companies who own water, or water rights, are about to make a fortune. I would also like to highlight a few issues that could, would, and will make water the biggest emerging market in the world: Flint Michigan, and California’s water crisis. I’ll talk more about these later.
Starting to see the value in water now? Even so, investing in water might not be done the same way you’re thinking.
“You Gonna Eat Your Tots?”
Thanks to Napoleon Dynamite for that wonderful title.
So why don’t we hear major media raving about food stocks? The reality is that they are uninteresting. Who wants to talk about carrots when we could instead talk about Nvidia (NVDA 0.00%↑) and Game Stop (GME 0.00%↑) going crazy?
So, why the high conviction for the food market?
Well, one reason in the new crazy high food prices we are seeing everywhere due to inflation. Buying food away from home is becoming drastically more expensive than buying food to cook at home. I think this trend will continue and we will see a shift to ‘take home food’.
Going long on food is like going long on the human race. I also believe that companies in this market are currently undervalued investors. Companies like Hain Celestial (an organic-focused company) and Mondelez (a grocery, meal, and candy company) are currently down 28% and 7% respectively.
Also, nearly all stocks in the food supply chain offer delicious dividends (a little pun for you there). No seriously though, most stocks range between 2%-5% easily. I say let it grow, let it grow (two puns in a row, nice).
All this being said, I think the best place to go is to the true source of our food: farmers. I plan on taking a deep dive into farm-related stock investing soon. I am very bullish on agribusiness: fertilizers, farmland, tobacco, machinery, etc.
Let’s Talk Specifics
This portfolio of 3 stocks consists of one REIT, one food, and one water stock. Before you even ask, yes, it had crushed the S&P over the past five years. The SPY 0.00%↑ (an S&P 500 tracking ETF) has returned 202.74% over five years — not too bad. However, my “basic same portfolio of just 3 stocks returned 433.95% which is over 19.3% annualized. That’s right, we crushed the market by over 12%.
Now I am sure you’re thinking that these three stocks give way to some massive risk, right? Wrong.
“The portfolio captured 107.43% of the upside of the [SPY] whilst capturing 75.77% of the downside.”
Less downside, more upside? Count me in. Enough talk, what are these stocks I am raving about?
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