Breaking News
0

Forget Blockchain: Invest In Old-School Winners Instead

By Zacks Investment ResearchStock MarketsJan 17, 2018 06:31AM ET
www.investing.com/analysis/forget-blockchain-invest-in-oldschool-winners-instead-200281241
Forget Blockchain: Invest In Old-School Winners Instead
By Zacks Investment Research   |  Jan 17, 2018 06:31AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

  • (0:30) - Warren Buffett Thoughts On Cyptocurrency
  • (4:15) - Emerging Technology: Boom or Bust
  • (8:30) - Buffett's 3 Ways The Market Could Keep Rising
  • (11:45) - How To Play The Market Like Buffett
  • (15:15) - Tracey's Top Picks: Old School Winners
  • (22:00) - Episode Roundup: Podcast@Zacks.com

Welcome to Episode #77 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.

Recently, Warren Buffett gave an interview on CNBC where anchor Becky Quick asked him about Bitcoin and cryptocurrencies.

He answered that he didn’t own any, wasn’t short any and would never have a position in them. Buffett then went on to say that they will come to a “bad ending” but he didn’t know when or how it would happen.

As you can imagine, he immediately came under attack from those in the crypto community for being out-of-touch, too old, and ignorant.

It’s nearly the identical response dot-commers had to his comments in the late 1990s.

Picking Winners in Emerging Technologies

When a new technology bursts on the scene, there are always dozens of competitors. After all, it’s seen as a gold rush and some people will get rich off of what is new.

In the 1800s, there were hundreds of railroads in the United States. But now, there are less than 10 big commercial railroad companies.

Similarly, there were thousands of automobile manufacturers and hundreds of domestic airlines when cars and airplanes came on the scene in the early 1900s.

But, again, today, the “winners” have won the contest. There are only a handful of big names in those industries. They are the survivors.

With cryptocurrencies and blockchain technology, it’s so new, there’s no way of knowing who the winners may be. Buffett’s strategy, then, is to simply avoid those emerging technologies until winners can be determined.

Investing in the Old-School Winners

Why not invest in those that have become the winners in the older industries?

These companies, some of whom have survived for nearly two hundred years, are clearly doing something right.

1. General Electric (NYSE:GE) is one of the original Dow Industrial components. Becky Quick asked Buffett about GE in their interview but he wouldn’t say, due to compliance issues, if he was buying now that shares have plunged. Is it even cheap enough? It still has a forward P/E of 18.3.

2. Masco (NYSE:MAS) makes plumbing parts like faucets, paints, cabinets and countertops. Founded in 1929, it now has a $14 billion market cap. Earnings are expected to rise 18% in 2018 after jumping about 29% in 2017.

3. Fortune Brands Home & Security (NYSE:FBHS) makes cabinets and plumbing, including the Moen brand, but it also makes doors and security devices such as padlocks by Master Lock. With a $10 billion market cap, it’s expected to see double digit earnings growth in both 2017 and 2018.

4. Sherwin Williams (NYSE:SHW) recently acquired Valspar and is now one of the largest paint manufacturers in the world. Founded in 1866 in Cleveland, it’s still producing double digit earnings growth all of these years later with analysts expecting earnings to pop 25.5% in 2018.

5. Deere & Company (NYSE:DE) traces its roots all the way back to 1837 in Moline, Illinois. This agriculture and construction equipment giant has had a few tough years as farmers cut back on their equipment spending but is turning it around with fiscal 2018 earnings expected to jump 22%.

Sometimes, for investors, the tried and true is just as attractive as the shiny and new.

What else should you know about why Buffett is avoiding bitcoin and thinks the market isn’t over valued?

Tune into this week’s podcast to find out.

Exclusive Buffett Report for Podcast Listeners

What 3 secrets drive the success of arguably the world's greatest value investor? Which 5 stocks might he buy right now if he weren't already a billionaire?

Today, podcast listeners are invited to download Zacks' Special Report, Invest Like Warren Buffett for free. At the same time, you may also look inside Tracey Ryniec's personal Value Investor portfolio to see more stocks at exceptional "discounts."

Click to see them now >>



Masco Corporation (MAS): Free Stock Analysis Report

General Electric Company (GE): Free Stock Analysis Report

Deere & Company (DE): Free Stock Analysis Report

Sherwin-Williams Company (The) (SHW): Free Stock Analysis Report

Fortune Brands Home & Security, Inc. (FBHS): Free Stock Analysis Report

Original post

Zacks Investment Research
Forget Blockchain: Invest In Old-School Winners Instead
 
Forget Blockchain: Invest In Old-School Winners Instead

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email