Asked 4w ago
David Kuo's always talks about this strategy for his portfolio, i would just like to know how would you classify your stocks in these categories?
Core - Dividend based, high free cash flow
Growth - ?
Speculative - chasing the next big thing?
I catergorise my stocks into Secular Growth, Defensive, cyclicals, and the in betweens for e.g. moderately cyclical- moderately growth.
I feel this way of catergorisation helps to me to understand the business better.
Terms such as Growth or value doesn't tell me much about how the underlying business runs for e.g. Microsoft was not doing as well for a few years. They were considered a value stock and suddenly some investors now consider they are a growth stock again because their growth rate is higher.
Instead catergorising them into a way that helps me understand the underlying business, helps me make decisions better.
There are certainly more differences between the cetergories, but I do not want to list an endless list, let me know if you want more information on any particular aspect.
I classify my stocks into catergories as such:
For each catergories I would place 2 examples but please exercise due diligence should you be interested to invest into them.
Value: Berkshire Hathaway, Coca Cola
Growth: Salesforce.com, Alibaba
Recovery: SATS, Banks
Dividend: REITs, Banks
Speculation/Trading: Slack Technologies, Fastly
Core - Companies im most confident of with good dividend and moat
Growth - Companies i expects to see it grow, be it share price or dividend, but slightly riskier
Speculative - Those i see in forums LOL but definitely will weigh pros and cons (rarely i buy this unless good potential)
I would add undervalued as a category because if a company is undervalued at current price, it can be seen as a growth (in terms of share price), core (in terms of fundamental) and speculative (potential to rise back).