Postcards: Four Stocks I'd Buy With $1,000 (And The Newer Office)

Sometimes, good things happen in the Florida Republic. Rather than spend found money, it's time to put it to work for the long haul. Let's tap four ideas for the next 30 years. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more [Postcards: Four Stocks I'd Buy With $1,000 (And The Newer Office)]( Sometimes, good things happen in the Florida Republic. Rather than spend found money, it's time to put it to work for the long haul. Let's tap four ideas for the next 30 years. [Garrett {NAME}]( Feb 20   [READ IN APP](   Market Update: Last week’s substantial one-day drop was a warning. We’re seeing signs of funds exiting and taking profits along the way. It might be time for [a Pirate to look]( Shorting]( a hedge with the Inverse Russell 2000 ETF (RWM). This is a bearish move on the energy front; refineries have taken a big one-day hit. I’d have no problem if the energy sector pulled back further… no problem if everything pulled back further, frankly. It would make finding some level of value in these markets easier. There’s not much… It’s hard to feel great about the markets heading into the Fed minutes tomorrow. The MACD on the S&P 500 ETF (SPY), Nasdaq 100 (QQQ), and Russell 2000 ETF (IWM) are pointing in the wrong direction. Dear Fellow Expat: When I lived in Chicago - my final time - I worked out of a WeWork for about a year. The Canadian startup had expanded to Chicago. I toiled within one of their spaces as an economist. It was an odd office - many bizarre startups came and went. The WeWork “ambassadors” always tried to get people to drink IPAs. The lighting was so bright it felt like you were working in a bizarre cross between an adult daycare and an East German sweatshop. But six years later, that place sounded like paradise. I’ve been working in my home for all of the post-COVID years. And the two years we consider “pre-COVID.” I needed to get out of the house in January 2024. Resolutions and so on… The “from home” experience wears on you. I’d been diligent only to have one car at the house. My wife took it to work. With her leaving her school (and taking my daughter to homeschool), she’d been driving all around Lee County. But they were still home enough to raid and upend the peace of the rest of the house. My daughter loves knocking on the office and asking me if I should change the “Yes” or “No” sign on the door to whether I’m busy or not… If I’m in there, I’m busy… and the hotel room service sign from The Boca Raton that I took will say “No.” As in… “No. Do Not Enter.” But she thinks the “No” means “No, I’m Not Busy…” It’s pure madness. Alligators can’t spell. I visited a few work-sharing places. They’re either extremely expensive - a front for people pretending to work and live in Florida for tax purposes. Or, they’re oddly run-down ex-office spaces from industries that are no longer a thing. Think of call centers in the United States… or where people hand-crafted doll furniture. For one of these beaten-down places they wanted $650 a month for wireless internet and a receptionist (who didn’t even work there). So, I did the math and came up with a better solution. Welcome to “today’s” office (or at least one of them a few hours a week). Doc’s Beach House, Bonita Springs (It was really cold) A second car is a lot smarter. For about $250 bucks less a month (including gas and insurance) - so long as there’s a WiFi signal (and there’s one in my phone) - all this can be done with a little more sanity and much healthier light. How I view it, let’s say I can save $1,000 to $1,200 a year working between home and various places that give me the freedom to write, research, and focus. This begs the question: What four stocks would I buy with that money? Let’s look at four great ideas for the next few decades. [Upgrade to paid]( No. 1: Generation Sick - AbbVie America is grappling with an unprecedented health crisis, embroiled in the era of the sickest generation in history. Chronic physical and mental health conditions, including diabetes, obesity, and widespread psychological distress, are at all-time highs. This epidemic transcends mere lifestyle choices, pointing to deep-rooted systemic failures. Meanwhile, the American population continues to age, and demand for senior housing, medicine, and biotech will expand over the decades. There will always be money in life-saving drugs and necessities to help Americans thrive. In addition, an aging, healthier population is good news for life insurance and health insurance companies in the future. AbbVie Inc. (ABBV) specializes in high-margin drugs and is developing a new pipeline of products. The stock has blown away the S&P 500 over the last five years… I expect the trend to continue. Even if I need to be patient, I’ll still take stock in one of the world’s most essential drugmakers at a dividend of 3.5%. Given that I expect the Federal Reserve will start cutting rates later this year, I think this is a great transition period for the stock.  It’s been active in two relatively new drugs — skyrizi and rinvoq — with overlap similar to the company's challenges with Humira, which is used to treat arthritis and other autoimmune diseases. Sales of both drugs remain solid, and the company anticipates that those gains will double by 2027.  The company has a very high free cash flow margin of 43%, and its return on equity is north of 34%. The combination of profits, momentum, and growth make it a great long-term play. I expect its financial health will only improve with new products and greater emphasis on shareholder value. With major acquisitions and strong growth expectations, investors might look at this stock and see a hefty valuation. I’d be thrilled if it does fall between 10% and 15% in the future. But a $1,000 portfolio could start now and think about adding later. Healthcare Runners-Up: Cigna (CI) - the government basically made them a ward of the state after the Affordable Healthcare Act. Semier Scientific (SMLR): A healthy, well-run company in the medtech space, but threats of patent expirations on simple technology loom in 2027) No. 2: Money in the Midstream - Energy Transfer (ET) Despite calls for dramatic investment in alternative energy systems, [the U.S. oil and gas industry will remain dominant]( in energy generation through the 2050s. Don’t take my word for it — the Energy Information Administration says so in every Short-Term Outlook Report. We like to turn our attention to the center of the oil and gas supply chain. Overall, expect the moratorium on natural gas export licenses to disappear after the election - as it feels like a ruse to keep natural gas prices low. So, we turn to Energy Transfer (ET). The company is a master limited partnership that transports natural gas and other fuels through pipelines. Simply put, they charge money to move fuels from Point A to Point B. Shares sit at $14.60 and pay an annual yield of 8.8%. The company just experienced one of any executive's largest insider buying patterns in a decade. Its Executive Chairman, Kelcy Warren, loaded up hundreds of millions in stock with his own money.  And shares continue to climb despite the recent collapse in natural gas prices. The simple truth is that natural gas will remain the dominant form of fuel for electrical generation for the next few decades (and possibly permanently if the “Green Dreams” don’t come to fruition.) If you want a long-term investment with an incredible dividend and gobs of cash flow., look to ET. It still has a long way to go from its 2016 highs in the $30s… and can get there by the decade's end. Any move to $14 or even $13 is a buying opportunity. Midstream Runners Up: Enterprise Product Partners (EPD): It’s six one way, half a dozen the other, but I prefer the insider buying name. Ardmore Shipping (ASC): A Model Portfolio stock with an upside of $20 to $21 in the next 18 months. No. 3: No-Brainer - Berkshire Hathaway… With a Twist The cost of one Class A share in Berkshire Hathaway is eye-watering. Last Friday, shares closed just short of $615,000 apiece. We don’t have that kind of money. But we should take some action.  So, [look at the]( Total Return Fund (STEW)](. This is an equity-based fund with low fixed-cost leverage and a large-cap focus with heavy exposure to Buffett and his investment style. It was founded initially as a fund called Boulder Growth and Income (BIF) but changed its name in April 2022. There’s something unique about the long-term appreciation upside for this fund: We can tap into fixed costs on senior-level debt and own great equity companies. This fund's founder is Stuart Horejsi, a long-term value investor who started buying Berkshire Hathaway stock when it traded at $265 a share, one year before I was born. For the past 43 years, he’s built a billion-dollar fortune and has enjoyed the fruits of the Benjamin Graham approach to long-term investing. Stuart has considerable skin in the game in this fund, as he now owns more than 46% of the fund’s shares. This fund owns $594 million in BRK Class A stock and another $132 million in BRK.B (Class B). It also holds a lot of stocks that Buffett loves, like JPMorgan Chase (JPM) and Yum! Brands (YUM), and Enterprise Product Partners (EPD). Here’s a breakdown of the portfolio from October. STEW trades at a 20.9% discount to its net asset value… so you are theoretically buying Buffett’s portfolios for $0.79 on the dollar. This is something you can buy and hold with confidence. Any pullback under $14.00 is a buy… and if we get down to $12.50 for any reason - buy a lot more. Buffett Runners Up - Berkshire B Shares (BRK.B) as it’s the only way you can likely afford it. Or buy Buffett's banking favorite, JPMorgan (JPM), as they’re (I say this sarcastically) on track to become the next national bank of the United States when the Fed finally implodes. Stock No. 4: Playing It Safe - Brady Corp. (BRY) The future of AI is bright, but the value has shifted to the pick-and-shovel plays - and has yet to truly be realized in the companies that will benefit from the margin expansions and profitability. It will help in manufacturing, but don’t overlook identification solutions. There’s a different approach I’ve discussed. It has to do with the [rising cost of compliance]( in America. Brady Corporation specializes in safety, identification, and compliance solutions for various workplaces. They produce labels, signs, and safety devices to help manage risks and improve organization across numerous industries. Brady Corporation might be considered a "defense" stock thanks to its safety and identification solutions within the defense sector, among many others. Its products are crucial for maintaining safety standards and regulatory compliance in various industries, including government, education, construction, utilities, and potentially defense-related areas. More government, more regulations… more money… I like the numbers - and think they can expand. The net margin is above 13.5%, return on invested capital sits at 16%, and it’s been profitable for nine of the last 10 years. It also has very little debt and rolls with a Piotroski F score of… 9/9. This is a great combination of momentum, profitability, and financial strength. This is an undervalued stock compared to its sector. And I can financially foresee margin expansion on top of a strong company. It looks like a great opportunity if it pulls back to $55 per share. Runners Up: For the trend of government involvement in your life, it’s Alphabet (GOOGL), although it’s likely got some downside in this environment. For surviving said government, look at John Deere (DE), a problem-solving and under-appreciated AI play. These are not positions within the Model Portfolio but stocks and reasonable price targets to watch and look for discounts if they emerge. Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()