Technical analysts live by the chart, studying volume and price movements, and the trend is their friend. Fundamental analysts put a company's annual report under the microscope to look for clues and secrets buried in the footnotes, trying to find value.
In other words, these analysts operate on opposite ends of the spectrum. But not when it comes to Texas Instuments.
I find large-capitalization stocks to follow and trade by examining certain stocks that meet my criteria and are also in the top 10 holdings of my favorite mutual fund, American Funds Fundamental Investors.
Let's take the gloves off. I am not a fan of index funds, though I am all for investors doing their own stock research and managing their portfolios through discount brokers.
But all eight of American Funds' dividend-focused equity funds, with at least 15 years of history added growth and value compared with the S&P 500 and the MSCI, a U.S.-based provider of equity, fixed-income and hedge fund stock market indices. No one should turn their noses up at the performance of a managed fund, provided the fund has low annual fees and discounted commissions for large investors.
So back to Texas Instruments. My last Texas Instruments trade was in March 2015.
What could be accomplished in weeks or months in the roaring 1990s took seven years. No wonder I retired.
In the midst of a market upset, I bought Texas Instruments three times at an average stock price of $29.16 on Jan. 8-11 and the last buy on March 11, 2008, at $28.15. I sold my position at $58.32 March 2015.
Ignoring dividends and commissions, I earned a 10.1% annualized return. The stock jockeys will laugh at me.
On one stock jockey website, the company offered an analyst that "leads his reader to top trades that netted 31 triple-digit gains in the last 12 months, usually in 30 days or less."
Wow. I wish I could to that.
I can't and couldn't, not even in the roaring 1990s. I remember losing clients during that period because I only generated 30% returns.
I acknowledge that there are people who can follow a chart and get in and out quickly. But the vast majority of my clients and some who have responded to my articles have told me that my strategies make them understand that an average, unsophisticated investor can actually buy a stock without taking undue risk.
I didn't encourage clients to own stocks unless they had maxed out their 401(k)s and could commit to a minimum stock portfolio of $100,000, buying two to three stocks in three to five diversified areas over a three- to five-year period. I prefer stocks over mutual funds outside a tax-deferred account because a stock portfolio is kind of tax-deferred.
At least the investor can better control the gains and losses. If a client wanted to buy just one stock, I advised them to open an account with Charles Schwab.
Investor Peter Lynch, in his book, "One Up on Wall Street," said that many market timers can be found in unemployment lines. Although I can't time the market, I can raise cash to dollar cost average in, as I did with Texas Instruments, buying the stock down three times to formulate my position.
I always chuckled when I heard a client say, "Sure, buy more! How low can it go?" I would reply, "zero" but probably not with a semiconductor company like Texas Instruments, which is in a cyclical business.
Where is Texas Instruments now?
On April 17, the Motley Fool said that shares of Texas Instruments are a better buy than those of competitor ARM Holdings.
Meanwhile, TheStreet Quant Ratings gives Texas Instruments a buy rating.
According to Zacks Investment Research, the stock is a hold and has a forward price-earnings ratio of 20.6.
I agree with Zacks, but recent TheStreet headlines say that inflation is up, the consumer price index is up, oil is up, interest rates are up with a likely increase in June and jobless claims are down. More importantly, October is less than six months away.
Texas Instruments was my only stock trade position since 2008. Buying and selling stocks sounds like work to me.
We let our American Funds roll because we like to travel and live 10 minutes from the beach.