It’s already been a month since I asked and since then I guess a lot of new members have joined the community. Again I was wondering what are your favorite stocks? And maybe more importantly why?
I don’t have favourite stocks specifically to be honest, I don’t look at it that way If I don’t favor them, they are not in my portfolio. Not sure what kind of answers you are looking for?
First of all, try seeing them not as stocks but actual companies you buy a part of. A stock is an impersonal thing, a metaphorical piece of paper.
You become part owner of a company when you purchase a stock, so that company is now working for you and directly (dividend) or indirectly (price appreciation), or both, paying you.
My favourite companies are those that pay a consistent quarterly/monthly dividend, have a (ideally) decade long history of doing so, have a history of raising their dividend while keeping the payout ratio roughly the same and also show capital appreciation over time.
I pick up these companies when their price drops through no fault of their own like a general market drawdown or a competitor doing something dumb and them being part of the (temporary) fallout.
If a company cuts their dividend, I sell it.
If a company raises their dividend while not raising their profit (and thus raising their payout ration), I sell it.
If a company doesn’t pay a dividend, I will buy a small position as a speculative growth story, but not a core holding.
If a company loses it’s moat or worsens their product/service causing loss of profit, I will sell it.