Confessions of an ADD Investor
Let me be clear from the outset: As far as I know, I don't actually have attention deficit disorder. However, to watch me work, you might think exactly the opposite.
As I write this, I have two monitors going. One has this Word document, and the other has my Google Chrome browser with tabs open for The Wall Street Journal, The New York Times, The Motley Fool's homepage, a Crossing Wall Street post, Facebook, and a 10-K report from the SEC's website. Meanwhile, Outlook is open and pinging me with new emails, and I have multiple conversations going over AOL's instant messenger. I also have multiple research-paper printouts in front of me, and my iPhone is sitting next to my keyboard with the Twitter app open.
I'm exhausted just thinking all of it.
Fortunately, I normally don't bring that insane energy to my portfolio -- and that's a good thing. Even though it gives you the feeling that you're "doing something" to control your financial future, trading manically tends to reduce your returns (Morgan Housel said it well in point No. 4). Heck, it's been shown that just checking your portfolio too often can lead to lower returns, since it exposes you to the often painful daily fluctuations and encourages short-term thinking.
So the good news for me is that just like the shenanigans that happen in Vegas, the companies in my portfolio tend to stay in my portfolio (with the usual caveats) -- and I generally only check my portfolio value a few times per quarter.
On the other hand...
When it comes to finding new companies to invest in, that's all out the window. There are thousands of publicly traded companies on the U.S. exchanges alone. Many of them have intriguing businesses and produce attractive returns. And with the market's recent slump -- the S&P 500 is down around 17% from where it where it was in early July -- there are quite a number of them that have seemingly attractively priced stocks.
The result is that when I sit down to start researching one good-looking company, another floats by on one of my many screens and, like the dogs in Up, I shout "Squirrel!" and run off in that direction. (No, I'm not proud of this!)
So, for this week at least, I'm going to take a break from that nonsense and actually drill down on a handful of stocks that I've had my eye on. Over the next five days, I'm going to take a closer look at each one of the stocks below and share what I find out. At the end of the five days, I'm going to boost one of them to the top of my personal "buy" list and put it in line as my next portfolio addition.
Forward Price-to-Earnings Ratio
Return on Capital
|PepsiCo (NYS: PEP)||13.4||13.1%||3.3%|
|Home Depot (NYS: HD)||12.6||13.3%||3.1%|
|ArcelorMittal (NYS: MT)||5.7||4.9%||3.8%|
|Exelon (NYS: EXC)||11.6||10.8%||5.0%|
|Aflac (NYS: AFL)||5.4||12.8%||3.5%|
Sources: Capital IQ (a Standard & Poor's company) and Yahoo! Finance.
There's a good industry mix here -- consumer staples, discretionary, materials, utilities, finance -- but the group is tied together by the fact that they all have businesses that have produced attractive returns (at least historically, in ArcelorMittal's case) and, on the surface, look cheap.
If you'd like to follow along with what I dig up on these companies, you can add any -- or all -- of them to your watchlist by clicking the " " icons next to the tickers. Once they're on your watchlist, any Fool article that mentions that ticker will pop up in your news feed. And if you don't have a watchlist yet? Go ahead and start one up for free.
At the time this article was published The Motley Fool owns shares of PepsiCo, AFLAC, and Google.Motley Fool newsletter serviceshave recommended buying shares of Google, Exelon, PepsiCo, AFLAC, and Home Depot, as well as creating a covered strangle position in Exelon and a diagonal call position in PepsiCo. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors.Fool contributorMatt Koppenhefferdoes not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter@KoppTheFoolorFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.
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