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Single Stock Alternative To Index Fund/ETF


Gregmal
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I know the most common answer is BRK, but otherwise, what if anything do you buy to achieve the best "lazy" return?

 

Most folks I would imagine would be suited to take Buffett's advice and just buy the SPY. Within the SPY however are a lot of different companies and at this stage of the game, and given what I view as a kind of inflection point in terms of "old economy" companies and "new economy" companies (this transition is clearly accelerating and the whole Amazon effect on retail is really just the tip of the iceberg) wouldn't it be more efficient to avoid the glut of companies that are within the index that could be labelled as either obviously overvalued or at-risk of serious disruption?

 

And while even BRK owns some great businesses that aren't going away anytime soon, I would still label a lot of them as old economy. As such my own intuition and gut feel is that out performance (similar to the Scott Hall discussions of value vs growth) would come from investing in some sort of proxy for the future economy. Something that will capture the rewards of either a stagnant or growing economy, meanwhile still hold up and come out stronger with any recession. Again, an index fund, but better.

 

For me, I find GOOG to fit this perfectly. While search/ad is the core business, GOOG is so well connected and innovative that they will without question have a hand in shaping the future and capturing the things that drive us there. Not only that, but they easily have the cash to make these investments, and are more or less untouchable in terms of competition(anti trust is probably the biggest threat).

 

Would be interested in hearing what/if anything people use as their lazy, just chuck money somewhere and dollar cost average vehicle.

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My biggest position is ELF.TO or E-L Financial and I think it has the characteristics that could make it the only position one could hold. The NAV is about 30% a life insurer in Canada, called Empire Life, and the rest of it's a global value portfolio.

 

The stock trades around $850 while the NAV is around $1220 so you can buy it at a big discount to NAV which gives downside protection.

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Something akin to Brookfield Infrastructure Partners ("BIP") is a good idea as it provides you some yield (4%), a 12 to 15% target return and access to infrastructure assets or Broadstone Net Lease which has a low teens target rate of return with a 10% minimum threshold & a 6% yield which targets net leased real estate.  There is also Ocean Yield with a 9.6% yield and owns shipping assets (ships) that it leases to others.  These are more akin to alternative assets.

 

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