GO
Loading...

One-Decision Stock Strategy Trounces the Market, Yet Again

Thursday, 1 Dec 2011 | 8:58 AM ET

As I was looking at my computer screen Wednesday afternoon, I was vividly reminded why investing is different then trading.

Gregor Schuster | Getty Images

Trading creates profits; investing creates wealth.

With a "one-decision stock" you identify and hope to own for decades, not days... With a two decision stock you must buy and sell at the right price making the process that much more difficult.

I began to write about one-decision stocks in 2010, which identified several specific public companies as having business models and management teams with characteristics that are so strong that the thought of selling them need not enter your mind. Investors literally make one decision: buy and hold.

Happily, the methodically and formula continues to work.

Twenty-plus years of significant outperformance following the one-decision strategy has once again proved to be the recipe success over the long and short-term, and through unprecedented market volatility periods.

Although, there is no such thing as a magic formula, and undoubtedly the years ahead will be difficult for both investors and traders, I continue to believe the likelihood of beating the market with a portfolio rich of one-decision stocks puts the advantage in your court.

Kaminsky’s On-Decision Stock Picks:

Suncor Energy: Suncor is the ultimate "one-decision stock" of my career, and a Canadian energy success story. I saw something special in the crude oil company in 1994 when Suncor's market cap stood at approximately $500 million. Today's number? $50 billion.

And with Thursday's announcement of the retirement of visionary CEO Rick George, Suncor may now become a possible takeover target.

Suncor CEO to Retire
CNBC's Gary Kaminsky has the details on Suncor Energy CEO announcing retirement.

American Tower: American Tower is riding shotgun to the mobile phone growth story. They make the towers that carry the network that supplies the broadband signal used in all mobile devices.
Expeditors International of Washington: Since 1988, this air and freight carrier has been led by its dynamic founder, Peter Rose. And Expeditors balance sheet is clean with $1 billion on the books in cash and zero in debt. The best part, management is smarter than the competition.

Ecolab: Ecolab makes hand sanitizers, a most peculiar secular growth story that only seems to grow with each report of Mad Cow, Swine Flu or some other exotic disease. It has only just begun to tap its real organic growth potential in markets in places like China, India, and Africa.

Clorox: How would you like to "clean up" with a stock that's already hiding in your cupboard? The Clorox Company offers strong organic growth. They don't need to make dilutive deals to jazz earnings. The balance sheet is clean, and the company is growing at a steady, yet predictable rate.

Kinder Morgan Energy: Kinder Morgan is the ultimate MLP (Master limited partnership) with predictable distribution growth, superior management and tax efficient total return for growth and income investors.

Public Storage : If you're looking to double down on dividends consider Public Storage and here's why. The Public Storage is a real estate investment trust sporting a dividend that is just shy of 3.25 percent.

Disclaimer

  Price   Change %Change
S&P 500
---
AMT
---
CLX
---
ECL
---
EXPD
---
KMP
---
PSA
---
SU
---

Featured

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

  • Sharon Epperson is CNBC's senior commodities and personal finance correspondent.

  • JeeYeon Park is a writer for CNBC.com. Follow her on Twitter: @JeeYeonParkCNBC

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.

  • Senior Producer at CNBC's Breaking News Desk.

Executive Edge