International Investing

I know it’s not yet 2012 and it may seem that I’m jumping the gun a bit, but here are what I truly believe to be the 10 best stock picks for the year 2012.

I believe a good portfolio really needs good diversification to hedge against possible unforeseen circumstances.  I like different currencies, companies that invest heavily internationally, companies with massive growth potential, large stable dividend paying stocks, etc.

I like the tech sector for 2012 but I’m not just going to pick 10 stocks from my favorite sector because I like to hedge a little.  Leave a little room for the uncertainty of this crazy world we live in.  If you hold onto all 10 of these stocks for the full year, I think you’ll be happy.  I have them all so we’ll be in this together.  In no particular order, here are my 10 picks:  

K-Swiss: (KSWS)

I know I said no particular order but this is by far my favorite stock this year.  Unless you are incredibly risk adverse, I highly recommend putting as much money as you can into this stock.  The analysts don’t get it.  This is a forward thinking California based company and they are changing the shoe industry.  The market cap is tiny at the moment.  Just to put things into perspective, $100 invested in K-Swiss would give you about the same % ownership as $20 000 invested in Nike.  The costly re branding campaign has hurt the stock a lot but a lot of this marketing campaign is viral.  It is sitting on Youtube for free and people are actively watching the commercials and telling their friends about it.  People are joining the Facebook Page in droves and I’ve read pretty much only great reviews for the K-Swiss Tubes.  I’m actually wearing a pair as I write this article and they are fabulous.  The K Swiss Tubes are in my opinion the best cross trainers for 2011-2012.  I love sports myself and I’ve owned the recent stuff from all the top brands.  K Swiss is sponsoring the right people in growing industries.  Fox Sports signed a massive deal with the UFC and it will invariably make the UFC even more popular than it is now.  Instead of only being able to watch UFC on PPV, you can now watch a lot of events over the next several years on Fox sports.  K Swiss has signed some of the best athletes like Jon “Bones” Jones and they are making all the right re branding moves.  Go to Youtube and type in “Kenny powers Kswiss” and you’ll see what I mean.  Read the comments there and on their growing facebook page.  Buy yourself this stock and a pair of Tubes.  Best move you can make.  FYI, the CEO owns about a 20% stake in the company and has a lot of incentive to make it work.  He’s got a proven track record of digging himself out of trouble before and he’s poised to do it again in the biggest way yet.

China Mobile: (CHL)

I’m living in China and I know what’s going on here.  I’ve been here for 9 years so I’d better.  A lot of companies are overpriced but China Mobile isn’t one of them.  They are going to be selling a lot 3G plans, which is very new in China, over the next several years.  The smart phone boom is going nuts here and China mobile is the leader in setting up these plans.  They aren’t cheap but the rising middle class can afford them.  I’m not Chinese but I’m going to get a good plan tomorrow.  I’ve checked into all the options and this is the best one.  Amazing pick that pays a solid 3.6% dividend.

Starbucks: (SBUX) 1.3%

The CEO of Starbucks is a genius.  This guy gets it and he’s really on top of his game internationally.  Expensive coffee is really all about branding and Starbucks is just taking over the world.  Their brand management is unreal and somehow they’ve been able to make their logo almost like a luxury item.  It’s even cooler in Asia than anywhere else in the world.  They are moving westward in China and are planning on ripping it up in India.  I’ve personally had the experience to watch Starbucks go from almost nothing to a huge success story in a country that didn’t drink coffee.  I know the analysts like the stock but I think the company will do better than anyone can even imagine over the next couple of years.

Coke: (KO)

Very safe 1.8% Dividend yield.  Great brand image.  They are playing off the growth of the world.  A can of coke is almost the first thing someone rising out of poverty can buy.  They bottle water all over the developing world at a great price and sell a lot of coke classic itself.  Very low downside risk and appears to be a company that will just keep trucking along quarter after quarter.  You won’t double your money in a year with this but you will be happy with this as a long term holding.

Procter and Gamble: (PG)

3.3% Dividend which is very strong for such a rock solid company.  Procter and Gamble coined market research and is a master of selling their zillions of brands all over the world.  They know what they are doing in each country and can really pick outstanding price points, in store locations, and targeted commercials.  I expect them to beat analyst’s expectations and I can’t see any real downside risk at all with them.

TD Bank: (TD)

This is a Canadian bank with a solid 3.7% dividend yield.  Canadian banks didn’t fall for the same tricks that happened in the US.  They are very steady and there is enough competition to make them keep up with the times, but not too much to erode profits.  There are a few banks that pretty much run Canada and I don’t see that changing anytime soon.  People pay back their loans and the bank just keeps profiting.  Simple and solid investment.

Apple: (APPL)

I am a huge believer in Apple’s brand internationally and I think they still have more room to grow than people think.  We all know the Iphone 5 is coming out and I think the sales will be insanely good.  People buy these products not only because they are great, but because they are the only fashionable computer item on the market.  Many people have no problem at all paying the large premium for Apple’s stuff just to look cool.  That’s not the reason everyone does it but it’s a reason that all the challenger companies won’t be able to touch a large % of Apple’s core user base.  Apple is in a league of their own and will stay that way for the foreseeable future.  Any Apple naysayer makes very weak arguments against the investment.  Some people buy computers to get the most bang for their buck.  Apple users proudly pay the big premium.  That’s why they keep beating expectations on Wall Street.  They don’t pay a dividend but certainly could at any time.  They are a cash cow already sitting on a mountain of cash.  I can see the company going over $500 before the end of 2012.  Very strong buy.

Amazon: (AMZN)

Jeff Bezos is a very smart and committed CEO.  They have a stranglehold as the world’s largest online retailer.  It makes a lot of sense to buy stuff online and the younger generations are getting more and more comfortable doing so.  The logistics and economies of scale make it almost impossible for any other company to come into this space.  The stock price has risen considerably lately but there is still a lot more room for growth.  When they start selling their tablets with the ability to sell the largely discounted e-books, expect the stock to jump.  All the readers out there will love to buy this new tablet and they are continually making the online shopping experience better, cheaper, and easier.  People are now even buying from their mobile phones with the Amazon App.  Solid long term hold.

Bank of Montreal: (BMO)

This is another solid Canadian bank paying a whopping 4.70% dividend.  My arguments for buying this bank are pretty much the same as above for TD.

NewsCorp: (NWS)

I know I said best 10 stocks but I just thought of another one and I couldn’t resist.  NewsCorp is making a lot of very smart moves to cater to the new generation of TV watchers.  Their shows on the FX network are outstanding and they just signed a massive deal with the UFC.  They pay a small dividend of 1.1%, but still better than nothing. If you look at what they are doing and who they are targeting, you’ll see that it is all very sensible and forward thinking.  It’s not just Fox News.  There is a lot to the company and a lot of smart people pulling strings there.  Expect the UFC ratings to move the stock price as well as extremely solid TV ratings in 2012 for the FX network.