Friday, October 27, 2006
How should Enterprise Architects invest their money?
Below are the top five holdings in my investment account:
- Starbucks (SBUX): The vast majority of American's are idiots when it comes to spending almost $5 for a cup of coffee. There doesn't seem to be an end in sight and therefore we should capitalize on the lack of fiscal discipline of others. Besides Starbucks is a great investment as it is even better than working from home.
- General Electric (GE) I have had this stock for about six years now and for a long time it was hovering in the low 30's. It seems as if the marketplace is now realizing that quality matters. They also have a pretty smart CIO (Hi Gary) and an even smarter enterprise architecture team that is almost as good as the one I work with. The only thing they need to do is dump NBC or at least figure out how to increase its ratings. Maybe a TV show with me as the host?
- Hanes Brands (HBI). Sara Lee is spinning off a variety of companies in order to unlock shareholder value. Look what Coach did once they escaped the idiots running Sara Lee into the ground. Hanes was spun off only two months ago but has already increased 10%. Once analysts start providing deeper coverage the price will go even higher. Besides, Underwear is something that everyone needs. In fact, they may need even more than their usual share when the Republicans lose the elections this year.
- Home Depot (HD). I have owned Home Depot for a long time. Based on at least a once a week visit there, I suspect I am responsible for half their revenue. While this year has been good in terms of hurricanes, next year may not. Folks will need to buy lots of fix it up stuff in bad weather. It will be particulary cold and they will also sell winter oriented stuff making their profits soar. Their strategy for paying more attention to women will also steal marketshare from Lowes.
- Novartis (NVS). Nowadays, who doesn't do drugs? They have a great portfolio, patent protection for the next several years and are located in Switzerland. How could it get better?
Anyway, I have also added medium sized positions recently in Toyota (TM) and Cognizant (CTSH). The interesting stereotypical thing that I have recently noticed is that lots of folks of indian descent tend to drive Toyota's. If American enterprises keep up the pace of outsourcing then Toyota will benefit on multiple fronts.
I added Cognizant to my portfolio because they are the most ethical (if there is such a thing) of all of the outsourcing firms. They were the first to get the principles of the Agile Manifesto, they tend to get hire billing rates than their competitors at Wipro, Infosys, TCS and so on. Cognizant when they outsource since they are US Based also have a re-badging practice for employees who are displaced that is non-existent in other firms. I also suspect that Cognizant is most in-line with the spirit of EEOC laws well beyond their competitors which should result in superior growth opportunities.
Next week I will share how I invest for retirement...