Michael Cuggino, portfolio manager with the Permanent Portfolio Family of Funds, offers two company names with products that will be in high demand this holiday season.



Mattel ( MAT)

Holiday Gift Equivalent: The Barbie Fashion Fairytale doll ($24.99), Fisher-Price My First Skates ($25) or the Matchbox Superfast 10-Pack ($26.99) cost as much as one share of Mattel ($25.57).

Cuggino's Take: "Mattel is a leader in toys, and they've got a suite of products and brands that have continued to be fun to kids of many ages. We're long-term investors, so for me it's the underlying business, the products and their ability to generate popular toys.

"Remember that toys are a good investment in multiple economic scenarios. Parents want their kids to be happy and grow and learn. It's an area that has some defensive abilities in negative markets. Mattel is not expensive, but it's not unbelievably cheap, either. It still might have room to grow. Plus, the dividend yield of 3% is very favorable."



Harley-Davidson ( HOG)

Holiday Gift Equivalent: The Kids Preferred Harley-Davidson Tool Kit ($19.99) and the Barbie Collector Harley-Davidson doll ($34.98) retail for the price of one Harley share, which trades at $33.05.

Cuggino's Take: "The stock has run up quite a bit and, based on earnings, it's getting on the more expensive side. But Harley-Davidson has a dividend yield of about 1.25%, which is still in excess of the 2-year Treasury. That's not bad in the current environment. We still think Harley's long-term prospects are pretty good, although you see it trade down once in a while when people question its future ability to add customers.

"Harley got unnecessarily beaten down in the economic slowdown, and that impacted their story. We tend to think the brand won't disappear, which is why we still own the stock. At $33, you can get 30 shares for $1,000 and you get a dividend on that."

Cuggino says the Permanent Portfolio Aggressive Growth Fund ( PAGRX), with $21 million in total assets, counts Mattel and Harley-Davidson among its holdings, along with FedEx ( FDX), Freeport-McMoRan ( FCX) and Costco Wholesale ( COST).

The Aggressive Growth Fund seeks to achieve long-term appreciation in the value of its shares while outpacing the broad market, Cuggino says. The strategy calls for staying fully invested in stocks at all times, thereby avoiding losses that can compound by switching capital in and out of the market. Returns have lagged the S&P 500 in 2010 as well as over the last five-year period. But the fund's returns over three years and 10 years outpaces the S&P 500.

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