These picks are based on James Altucher's just-released book, The Forever Portfolio. Be sure to read the first and second excerpts, published last week as a service to readers.
I am never, ever, never going to do it again. I really do not enjoy the process of writing a book. I would rather sit through a 1,000-hour opera than write another book. It's hard to write words that will be useful enough that they can compete with the words in the other 100,000 books that are being published this year. Not to mention TheStreet.com, which I can read all day long.
I'm mentioning all of this because my latest book,
, came out last week. But first, I have a confession to my publisher. It took me only three weeks to write it. Yes, I know, I was five months late delivering a manuscript. It was so late that you almost wanted the advance back. And I'm sorry, Jeffrey, that I stopped returning your phone calls when the book was two months late. And Jillian and Courtney, I'm sorry that several times I answered the phone and pretended to be an answering machine: "James Altucher is either on the phone or out of the office right now..." I actually don't have an answering machine. That was me. Nor do I have a secretary. You know, the guy who kept answering and saying, "James Altucher is not in the office right now"? I don't even have an office.
What happened was this. The book was due in November. By mid-February I hated all 60 pages I had written. Nobody needs another book about picking the latest hot stocks. Borrring. Particularly not in this environment. I was falling asleep while reading my own words. That's not a good sign. I remember telling my business partner I was just going to send the advance back and that my agent, Dan M., who I went to nursery school with, was never going to speak to me again despite the fact that I was the godfather of his second child.
But then I had an idea. Why not write about whatever I wanted to write about? One condition was this: Every page had to be useful. But it could be useful about stocks, jobs, entrepreneurship, dieting, games, Chubb Rock, chocolate, anything. And fill it with the craziest, but true, stories and anecdotes I could think of. The other condition was: It really had to help people stop worrying. People worry about their money all the time. And if they are not worried about money, then they are worried about their looks, their jobs, their families, etc. For instance, right this second, I'm pretty sure my wife hates me, and I'm worried about it. But heck, if I read my book, I might stop worrying about that.
The first line in the book is, "I don't like to worry." Here are some of the chapter titles:
- "Bloody Marys, Dividends, and the San Francisco earthquake"
- "The Entire Internet Is Going Down and There's Nothing We Can Do About It"
- "Bubble 2.0: Women's Legs and Tattoos"
- "Diamonds, Clothes, Chocolate: Live the Good Life"
I actually had a fun time writing it, and from mid-February when I was in despair to the time when I submitted 260 pages was about three weeks. I even made a crossword puzzle from scratch and put it in the middle of the book. I never saw a book in the investing section that had a crossword puzzle in it, so I wanted to do it.
But, ultimately, it's a book where there's an undercurrent about stocks and investing. In particular, which demographic changes are going to be so overwhelming that you can buy the stocks behind those demographics right now, never think about them again, and make money over the long haul. Here are a few:
: This trend is never going away. People get more and more obese, and some $30 billion in obesity-related costs are sucked out of the GDP each year.
Stock Pick No. 1
is my favorite play in the space. The company makes the masks that detect and help prevent sleep apnea, which is a condition that results when the neck is obstructed from breathing at night because of fat. This will not be affected by the economy, the stock market, a housing slowdown, etc. The more people weigh, the more people need sleep apnea masks, and RMD is the leader.
Stock Pick No. 2
provides various services related to identity theft: credit screening, analysis of unusual credit activity, identity theft recovery services, etc. It trades for just 3 times cash flows and has been destroyed in this market, but long-term it's a safe bet. The number of reported instances of identity theft each year hasn't had a single downtick in 20 years, and it's only getting worse. Intersections is the leader.
: I know it seems ridiculous to recommend a company in the money management space, but there's $100 trillion in wealth on the planet and someone needs to do the job, even if there's volatility along the way. Let's not forget what company has, so far, been "the last man standing" --
Stock Pick No. 3
. And the company literally rules the world at this point: Bush's secretary of Treasury, Clinton's secretary of Treasury, the president of the World Bank, president of the Canadian central bank, governor of N.J., Bush's chief of staff, former director of the National Economic Council -- the list goes on and on -- all were Goldman execs. Warren Buffett is in the stock at $120, which is almost double where the stock is now. Time to buy and hold forever.
: A topic very important to me and 6 billion other people. As women reach the age of about 45 to 55 (and every year in the U.S., that demographic gets several million people larger) they deal with issues ranging from varicose veins to "What do I do with that tattoo I got 30 years ago that's now all flabby?" RFID lasers are the trick, and the leaders are:
Stock Pick No. 4
, trading for just 6 times earnings, and
Stock Pick No. 5
, which is interesting to me because the entire company trades for a $100 million market cap but is profitable, has $98 million cash in the bank, and is debt-free. So you get the entire company, in an important demographic space, for free.
: Half of the hospital beds in the world are filled right this second by people suffering from diseases related to unclean water. While the world's population has doubled since 1950, our use of water has tripled. And how much more water is there to drink? Zero change. Consequently, ever-larger portions of the planet are using water that is deemed unsafe by current U.S. standards.
Stock Pick No. 6
has a growing division that detects biological contaminants in water. This is not only a clean-water play but also a terrorism play. Additionally, the company has products that help diagnose illness in animals. So they are good to cats.
: The last time I drove, many, many people suffered. I'm sorry. Last year there were more than 1 million auto-related deaths. That number is only increasing as people all over the world participate in the rural-to-urban move taking place in all emerging economies.
Stock Pick No. 7
has with a 7% dividend and is the leader in auto safety. It holds the patents on airbags, seatbelts, etc. The U.S. mandates that all of these products be put in cars, and other countries are only beginning to follow suit. When they do, they go to Autoliv.
- Chocolate: Stock Pick No. 8: Hershey (HSY) - Get Report
- See better: Stock Pick No. 9: Luxottica (LUX)
- Avoid a pandemic: Stock Pick No. 10: Genzyme( GENZ)
I really don't like to worry. In markets like this that go up or down 5% a day, it's too stressful to be starting at a quote screen. But if you know that you are in investments with solid balance sheets that are helping solve the world's ills -- particularly as those ills get ever greater due to demographics -- then you can rest easy at night.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider Cynosure, Cutera and Intersections to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
At the time of publication, Altucher and/or his fund was long Goldman Sachs and Autoliv, although positions may change at any time.
James Altucher is president of
LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for the
and the author of
Trade Like a Hedge Fund
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
to send him an email.
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