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Over the past few days, the stock market has taken an absolute beating. But did you know, it is during market downturns where millionaires and even billionaires are made? Take John Templeton, for example, who during the Great Depression went out to his broker and bought shares in every single stock that was trading at less than $1 at that time. And what he essentially was doing was buying value stocks, stocks that had been severely beat down. And some of those stocks were in bankruptcy. Some of those stocks were seeing a tremendous decrease in profits. Many of the stocks ended up going to zero, but many more ended up recovering and rallying to insane profits from where John Templeton bought in at. And because of the strategy of buying these undervalued, beat down stocks, John Templeton became a billionaire in the stock market.
And this is a lesson for all of us that as the stock market goes down, we have to continue to be a buyer of stocks for long term investments. I’m not talking about short term trades here. I’m talking about long term investing. When focusing on long term investing, buying value stocks is the best way to make money on the stock market. If you look at any person who has become a billionaire in the stock market, they have done so with value stocks. That goes for not only John Templeton, but other billionaires like Warren Buffett.
So what I did to help you learn how to do value investing, is I started a millionaire club portfolio, a portfolio that we started with $2,000 last year. And our goal is to take this up to $1 million sometime within the next ten to 15 or 20 years. And every other week we are depositing $250 into this portfolio, a grand total of $6,500 a year. That would be like maxing out a Roth IRA. And by buying value stocks and using the same strategies that John Templeton, Warren Buffett and many other billionaires used, we are growing this portfolio. We’re currently up to about $8,400 in the account.
What I want to do is just very quickly go over the account and then we’ll talk about two stocks that we added on to the portfolio last Friday. Now, as we go through this portfolio, you’re going to notice a lot of these stocks are up, a lot are down. That’s fine. We are going for long term holds. And every single stock in this portfolio has been held for less than a year so far because we just started the portfolio. So we have a long ways to go before we really start looking to take profits on many of these stocks – unless for whatever reason, some of these stocks just get massive rallies.
The stocks we’re currently holding are:
- ALLY – Ally Financial
- AMTD – AMTD Idea Group
- ATLC – Atlanticus
- C – Citigroup
- CCRM – Cross Country Healthcare
- CMC – Commercial Metals
- CVS – CVS Healthcare
- CVX – Chevron
- ECPG – Encore Capital Group
- FINV – Finvolution
- GM – General Motors
- GRVY – Gravity
- GSM – Ferroglobe
- HDSN – Hudson Technologies, which happens to be our best performer right now
- INVA – Innoviva
- OXY – Occidental Petroleum
- QFIN – Qifu Technology
- TGNA – Tegna
- VALE – Vale
- VYGR – Voyager Therapeutics
- WBA – Walgreens Boots Alliance
- XOM – ExxonMobil
- ZIM – ZIM Integrated Shipping
Now when it comes to the best stocks to buy, now the best stocks to add to the portfolio, one of the things that really stuck out at me is the fact that oil prices are going up. And as oil prices go up, this means that any company that deals with oil or gas is generally going to become more profitable in the future. So when it came to adding on to stocks this time around, I was really looking at the oil stocks. In addition to that, if you recall from the buys we made two weeks ago – I had added a new position, which was CVS Pharmacy, but I had only bought one share. So that got me to wanting to increase that position a little bit more in DCA into it.
For that reason, the stocks that we bought last Friday included CVS – one additional share of that at $70.74. We bought one additional share of Occidental Petroleum ticker OXY at $66.35. And we bought two additional shares of commercial metal, which is ticker CMC, which is running at $51.90 at the time that we bought it. By the way, if you want to know everything that I buy and you want to get in on these trades, the second I actually placed the orders rather than waiting for the YouTube video to come out, you can follow me on Twitter at https://twitter.com/RealScottCurry.
So let’s go through these stocks that I bought last Friday and let’s talk about why I bought these particular stocks. We start with CVS. Now part of the reason is because we only bought one share last week. We only bought one share because I wasn’t really certain about this stock. It was still falling. It was still down trending. I wasn’t super duper certain about the stock. That’s why we only bought one share. But this time around I noticed that the short volume was decreasing. The number of short sellers were starting to go away. People are starting to cover. That means that short sellers most likely feel like the stock has already bottomed out and does not have a lot more room to go down. So that gave me a little bit more confidence to go ahead and double down on CVS and buy one additional share.
Now, when it comes to OXY, Occidental Petroleum, the reason I added on to this stock is because those oil prices are going up. Now, as you can see here on OXY, the current PE ratio is 11.18, which is higher than the sector average of 7.64. Still, even though OXY does have a higher PE ratio than the sector average, this actually has the better fundamentals of a lot of the other companies and for that reason it’s still undervalued. It’s still below 15 and that’s why I felt like OXY was a better buy than a lot of the other oil stocks out there. With oil prices continuing to go up and Occidental Petroleum remaining a value stock, I felt like now was a good time to go ahead and add on an additional share. Of course, it’s not just me buying Occidental Petroleum. Warren Buffett has been buying it as well. So we both see the same thing. We both see the value in Occidental Petroleum.
The third stock that I bought is CMC, Commercial Metals, and this is a steel manufacturer here in the United States. Now the reason I bought this stock is because they continue to increase in value, they continue to increase their profits, they continue to increase their revenues, they are going up, they are growing as a company. And what I really liked is the fact that over the past couple of weeks CMC has fallen in price. It’s had quite a bit of a pullback, which means we’re essentially able to buy the dip, we’re able to get this at an even better valuation. And to show you what I mean, the current PE ratio on CMC is running at 6.42 compared to a sector average of 8.28, putting this stock below the sector average on. And I just felt like because of all of that, the fact that it’s growing, the fact that the PE ratio is quite low. This is a great value stock to buy right now.
And finally, I just want to briefly talk about some people that asked me if I was going to sell Hudson Technologies and take profits since we were up about 40% on this stock. And the answer, quite simply, is no, we’re not taking profits right now. The Hudson Technology PE ratio is running at 8.74, which is less than half of the sector average. This remains a very undervalued stock. So we’re not going to sell this and cut our profit short. We’re going to hold it and be looking for some opportunities to buy more as this continues to go up and the valuation remains low. Remember, as stocks are going up in price, you don’t want to look for an opportunity to sell. You want to look for an opportunity to add on and buy more because that is a stock that’s going up, that’s a stock you’re making money on, and you ideally want to be looking for opportunities to double down so that you can grow your money even faster.
On the other hand, as the stock is going down, you don’t want to add on to that stock and just lower your cost average, because as you double down on a losing stock what that usually does is it just causes you to lose money twice as fast. So I like to double down on winners and I like to cut my losers. Now, given that this is more of a longer term portfolio, you’re not going to see us cut on a short term downturn. We’re going to continue to evaluate every single quarter and every other week trying to find the best opportunities in the market at that time. And we’re going to continue to buy in and continue to dollar cost average in and continue to grow the portfolio. So I just wanted to give that as the reason why we have not sold HDSN and why we do continue to hold it and we’ll probably continue to be holding that stock for many, many years to come.
If you want to join us in the Millionaire Club portfolio and you want to get a kick start to your portfolio, get some free stocks and some free cash so that you can get started a lot sooner and you can make money a lot faster, I want to recommend both Moomoo and Webull, depending upon what country you’re in. Webull is available here in the US as well as the UK. Moomoo is available here in the US, in Canada, and Australia. So depending on what country you’re in, those are the brokers you can check out. Moomoo has some of the best offers right now. They’re offering up to 16 free stocks when you make a deposit using this link. The only thing about Moomoo is you do have to keep your money in there for at least 60 days. Of course, really no big deal if we’re doing a long term portfolio like that. With Webull, you’re going to get up to 12 free stocks, but possibly as low as six free stocks. It just depends upon how lucky you are. Both of those are going to require at least a $100 deposit.