Simple, safe, diversified, profitable portfolio


A while back a professor of mine was discussing investing in stocks. His focus was coming up with a portfolio that was diversified, relatively safe and with long term growth potential. When he got down to it he told the class that we should invest in companies that we are familiar with and that we give our money to.


Pretty simple idea. So over a year ago I started thinking about what companies I pay on a regular basis and also what companies serve my business. I called this “My economy.” If you sit down and think about where your money goes and what services you use at your job or business you quickly amass a list of more companies than you might think.


Starting with the obvious:

  1. Where do you shop?

  2. What products do you buy?

  3. What utilities and services do you use?

  4. Which cell phone provider do you use?

  5. Which medications do you take?

  6. Who is your insurance provider?

  7. Which vendors service your business?

  8. Do you use specialty software or services at your job?

When you get through your list you will see that it is likely a mix of blue chips, big tech, high growth, businesses with moats and utilities. Your list is likely composed of solid companies with legitimate products and services. You probably choose these companies because they offer the best quality, service or price. All these reasons are competitive advantages for companies offering in demand products and services. Add to this the fact that most these names are in the news, you visit the stores/ websites often and you are able to “measure the pulse” of these companies.


In my case, my business is a bar/restaurant. Because of this I use several blue chip, dividend aristocrat type companies like: Sysco, Ecolab, Cintas and NCR.


My familiarity with NCR made me money this year. Why? Because I knew that NCR was/is transitioning to a subscription based model. Rather than sell a $20,000-$100,000 point of sale system to restaurants every 8-10 years they are now signing up customers for contracts averaging $1,000 to $4,000 monthly. NCR happens to be one of the largest providers of restaurant POS systems in the country. In addition with COVID-19 lockdowns many of NCR’s customers, myself included, added web ordering capabilities for the first time. This feature alone cost my business nearly $5,000 and increased my monthly service fee with them by about $150 per month. Based on the shift to web ordering, I knew NCR would beat EPS estimates in Q2 of 2020.


NCR is just an example and it's nothing mind blowing but keeping an eye on companies you are familiar with and knowing a bit more than the next guy will often be an advantage.


Below you will see the mock portfolio I started in 2019. I did not have money in most of these stocks and I did not manage, add or drop any of the stocks on the list. If I had the results would likely be significantly better. Also note that AAPL stock split is not accounted for in the results. 11/21/19 to 1/23/21



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