John Dorfman Columns category, Page 7
Come join my Derby of Economic Forecasting Talent
They never see it coming. By “they,” I mean almost everyone. By “it,” I mean a surprise in the economy. As evidence, consider my annual Derby of Economic Forecasting Talent (DEFT), which has just concluded its 19th year. Inflation in 2021 heated up to 7%. Not a single one of...
John Dorfman: Why I think George Soros is wrong about Rivian
George Soros recently bought shares of Rivian Automotive Inc. (RIVN). I think he’s wrong. Shares in Rivian, an electric-truck startup backed by Amazon.com Inc. and Ford Motor Co., trade for 6,637 times the company’s revenue for the past four quarters. That’s the kind of multiple you see when investors mentally...
John Dorfman: Beware of stocks selling for 100 times revenue
Just as there are no sure winners in the stock market, there are no sure losers. But I can tell you something that’s close. If you want excellent odds of losing your money, invest in a stock selling for 100 times revenue or more. Each year from 2000 through 2006,...
John Dorfman: All hail the balance sheet powerhouses
For the past half dozen years, investors couldn’t care less about a company’s balance sheet. But now that interest rates are rising, companies with lots of cash and little debt will increasingly hold the advantage. You’ll find 32 such companies this year on my annual list that I call Balance...
John Dorfman: 3 stocks bucking downtrend
It’s been a rough year for the stock market so far. Here are three stocks that are bucking the downtrend and that also are relatively inexpensive, selling for 15 times earnings or less. These stocks have managed to rise even as the Standard & Poor’s 500 Total Return Index fell...
John Dorfman: Catching falling knives: Jim Cramer’s picks and my own
Jim Cramer is one of the most controversial stock-market pundits and one of the most widely followed. He hosts the “Mad Money” segment on CNBC television and founded The Street.com, a popular financial website. On Jan. 28, Cramer recommended a few stocks that have fallen sharply in this year’s stock-market...
John Dorfman: January’s slide doesn’t mean stock market doomed for 2022
“As January goes, so goes the year” in the stock market. Thus runs a common belief among traders. If you believe it, you’re probably scared right now, as the Standard & Poor’s 500 Total Return Index was down 7.66% in the first three weeks of this year. Take heart. The...
John Dorfman: EBay and Overstock.com are on the Casualty List
I’ve always liked stocks that have taken a beating. The market has punished them for their sins, but sometimes the market goes overboard. That’s why each quarter I compile my Casualty List, comprising stocks that have been pummeled in the latest quarter, and that I think have major comeback potential....
John Dorfman: Analysts’ most-adored stocks trailed the market yet again
Suppose your son falls in love with a beautiful Wall Street analyst. What should you do? Don’t try to block the wedding, but don’t take your future daughter-in-law’s advice on which stocks to buy. For more than two decades, I’ve been tracking the fate of the four stocks analysts love...
John Dorfman: Robot portfolio: value in extreme
Investors are keenly aware that growth stocks have beaten value stocks five years in a row. So what am I going to recommend today? Some extreme value stocks. Beginning in 1998, I’ve started the year with the Robot Portfolio, comprising the ten cheapest stocks in the market. My measure of...
John Dorfman: Why I own only 2 of the Sacred Seven stocks
There are seven stocks that investors seem to worship. In the parlance of the 1970s, they are one-decision stocks: You are supposed to buy them and never sell them. Call them the Sacred Seven. The blessed septet are Alphabet Inc. (GOOGL, formerly Google), Amazon.com Inc. (AMZN), Apple Inc. (AAPL), Meta...
John Dorfman: Peloton leads market’s parade of losers
Part of Peloton Interactive Inc.’s stock decline this year was funny. But the loss of 73% for the year to date (through Dec. 21) was not so humorous. As shown in the accompanying table, Peloton suffered the biggest loss of all stocks with a market value of $5 billion or...
John Dorfman: The Bunny roared in 2021
The Bunny Portfolio is hopping again. It bounced to a 36.6% return in the past year. I named this hypothetical portfolio after the Energizer Bunny of battery-commercial fame, which is “still going” long after you’d expect it to lose its energy. The companies in the Bunny Portfolio have done well...
John Dorfman: CEOs buy their own shares at loanDepot, Uber
It pays to keep an eye open when corporate chieftains buy or sell their company’s stock. Here are four dispatches from the (legal) insider trading front. loanDepot Based in Foothill Ranch, Calif., loanDepot Inc. (LDI), is a nonbank consumer lender. Much of its business consists of home equity loans and...
John Dorfman: So far, Joe Biden leads all presidents in market performance
So far, Joe Biden leads all U.S. presidents in stock-market performance. We’re in the early days, of course. Biden hasn’t served a full year yet. And the market slide on Nov. 26, if sustained, could change the numbers rapidly. But through Nov. 26, the Standard & Poor’s 500 Index has...
John Dorfman: 5 GARP stocks that look like good bets to me
Barring a reversal in the last few weeks of this year, growth stocks will beat value stocks in 2021 for the fifth time in a row. These things tend to run in spurts. Value beat growth seven years in a row from 2000 through 2006. For those who don’t know...
John Dorfman: Quidel, Logitech candidates for January Bounce
Punished for their sins, real or imagined, a few hundred stocks are down this year despite a rising market. Investors are busily selling these unfortunate stocks, establishing tax losses that can offset their gains elsewhere. In effect, the losers get kicked while they are down. Some have fallen to what...
John Dorfman: Loews, Graham Holdings are selling below book value
Sure, the stock market’s on the expensive side. But some stocks still are selling for less than book value (essentially, corporate net worth). Why should you care? Because, despite skeptics who say book value is an obsolete measure, buying stocks below book value can be a highly profitable strategy. Beginning...
John Dorfman: AMC may be ugly, but it’s winning Keynesian beauty contest
John Maynard Keynes, a canny investor as well as a famous British economist, wrote in 1936 that the stock market resembles a beauty contest, with a twist. The goal, he said, is not to select the contestants who are “really the prettiest,” but rather those whom the other judges will...
John Dorfman: Purloined Portfolio aims to steal from managers I respect
If you’re going to steal, steal from the best,” Woody Allen once said. Once a year, I try to do that. My annual Purloined Portfolio features ideas I lift from other money managers. My Purloined Portfolio from last year returned 45.9%, thanks mostly to gains in Alphabet Inc. (GOOGL, idea...
John Dorfman: Ethan Allen, Snap-on have dividend appeal
When clients ask me to emphasize dividends, they usually mean dividend yield. The yield is a stock’s dividend divided by its price. A $50 stock paying a $2 dividend annually has a yield of 4%, and dividend-conscious investors often look for a yield in that zone or higher. I gently...
John Dorfman: Micron and ViacomCBS are on the Casualty List
The stock market came in like a lamb and went out like a hyena in the third quarter. Gains in July and August were followed by a slide in September. When the dust settled, some stocks had been knocked down to what I consider attractive levels. Identifying such stocks is...
John Dorfman: My buy-sell ratings on the 20 largest stocks
You won’t find Facebook or Procter & Gamble in the portfolios I run. But that doesn’t mean I never think about them. Once a year in this column, I give my “buy” or “avoid” opinion on the 20 largest stocks. Here are my latest ratings, from the very largest (Apple)...
John Dorfman: A 97% gain wins my short-selling contest
Providing after-school online tutoring to students in China used to seem like a good business. Not anymore. For much of 2020, Gaotu Techedu Inc., one of the companies in this field, had been dogged by allegations that it had inflated its financial results. Then in July 2021 came the final...
John Dorfman: Insiders buy at Terminex, Westlake
Ever have a problem with mice or termites in your house? If so, there’s a decent chance you called Terminex. Terminex Global Holdings Inc. (TMX), based in Memphis, Tenn., is the largest pest control company in the U.S. It has 2.8 million customers in 47 states and 22 countries. Brett...
