“Stand by your stocks as long as the fundamental story of the company hasn’t changed”
– Peter Lynch

This is what the Stocks to Watch 2021 list is going to consist of. I’m standing by the stocks and brands that I trust the most. I own several of these stocks already and plan to hold them while looking to add others. While the products and services of these stocks are well known and are not going anywhere anytime soon, their stock prices will fluctuate. This is NOT a buy list, it’s a trends list containing stocks of companies I believe will be around for years, growing sales and earnings, regardless of their recent performance.

I am sticking with the steady and consistent performers this year, stocks and companies that have proven themselves already. I have sprinkled in a few newbies but the bulk of the list are known brands. I believe this will be the trend going forward while smaller and lesser-known stocks will be volatile with short-lived hype.

I’m not posting the latest fad list of growth stocks that may pump up quickly in the matter of weeks or months only to worry if they will they collapse. Let’s leave that to the traders because I trade poorly.

Boring? Perhaps, but that’s great investing as the big trends last for years.

We should NOT want to be in-and-out of positions quickly. We should want to hold them, over time. We want to learn to be patient during drawdowns and negative headlines, knowing the story of the underlying stock has not changed. This is a lot easier said than done, especially in today’s world of instant satisfaction and gratification.

Playing the long game is a lesson that has been flashed to me constantly over the past twenty years but I think I am only starting to learn it now. I hope to continuously get better at applying this lesson over the next twenty years as it will substantially increase my bottom line.

2020 was an incredible year, in terms of the stock market and particularly growth stocks. The Stocks to Watch 2020 list finished the year with a collective gain of 202.35%, an incredible feat during a global pandemic. It was not surprising as many of the trends I identified in January were only accelerated by the pandemic, QE and the work-from-home lockdowns. All 15 stocks showed a gain and 12 of the 15 ended with a triple digit gain. LVGO was the biggest gainer, up 457.74%.

I don’t expect 2021 to repeat this feat so our expectations need to be set now, back to historical norms. In fact, I see several of these stocks as extended and beyond ideal entry areas and know they may be vulnerable as I post this annual list on an arbitrary date every New Year. Please pay attention to the individual analysis as several of these stocks are ripe for a deeper correction which will allow for better setups in the future. If you own them already, hold patiently and look to add on constructive dips.

Nothing on this blog is a recommendation to buy, sell or hold, rather it’s a diary of my own analysis into yearly trends. Again, this is NOT a buy list. This list identifies trends which I believe will continue to last for years.

I screen, watch and then buy stocks based on a few simple parameters:

• Great product, service and brand
• Rising sales QoQ and YoY
• Rising EPS QoQ and YoY or EPS looking to turn positive (from negative territory)
• Increasing institutional sponsorship
• Technically: grabbing near support, at a breakout or within a base (near the 50d or 200d moving average)

That’s really it – I keep it simple.

I must repeat what I said last year and will repeat every year:

The annual “Stocks to Watch” list often includes newer and up-coming growth stocks that I own or candidates I am looking to own. Stocks such as AAPL, AMZN, GOOGL, MSFT, NFLX, FB, V, MA, etc. should be owned in almost every portfolio already, whether in your active trading account or a more passive retirement account. Own those stocks as they will all likely double or triple over time, once again. Own an index fund as well and add dollars to it annually, during up and down years – just do it and check back in 30 years.

Honestly, 95% of all folks should just own index funds and call it a day and forget about trading or investing in individual equities.

My annual blog post, Stocks to Watch, targets equities that I trade within my active investing account, an account that’s smaller and more active than my conservative accounts (retirement, index and company stock). I don’t disclose the number of shares or the size of the account as that’s personal information. What I will disclose, here and on twitter, is what I own, what I buy and what I sell. I do believe in being transparent with the equities I hold as well as the equities I don’t when discussing them on the blog or social media.

I don’t trade for a living nor do I aspire to trade for a living. I invest to increase my overall net worth and to “play the game”. I do get a thrill at trying to beat the market averages by making my own decisions. Some years this works and in others, it doesn’t.

“Know what you own, and know why you own it” – Peter Lynch

Let’s dive into the trends and my favorite brands to own in 2021:

Trends that will continue during and post COVID & 30 stocks I like across the groups:

• E-commerce: SHOP SE PINS ETSY CHWY
• Payments: SQ PYPL
• Security: CRWD OKTA ZS
• Edge & Cloud: FSLY NET APPS TWLO
• Database: MDB DDOG PLTR
• Health: TDOC GDRX
• Fitness: PTON
• Streaming: SPOT
• Digital Adv: ROKU TTD
• Tech Utilities: ZM DOCU CRM U FVRR
• Services: UBER ABNB

NOTE: The bottom of this blog post lists 10 additional stocks that I considered but didn’t make the official cut (mostly newer names) and the 17 growth stocks I own as of today.

Enjoy my 15 Stocks to Watch for 2021, in no special order (stocks I own on this list = *):
TDOC*, PINS*, CRWD*, FSLY*, NET, APPS, DDOG*, U, PTON, ROKU*, ZM*, DOCU, CRM, UBER*, ABNB

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Four years later and my wife’s stocks are still outperforming the major market indexes. She doesn’t even know it but her spending habits pick far better stocks than most folks I know, including me. My wife doesn’t watch the market, actively invest in the market or care to look at a stock chart but she sure can predict where the money will flow.

On August 5, 2014, I put a collection of stocks together that represent the products and services of companies used most often by not only my wife but our family as a whole. I called it “My Wife’s Mutual Fund” and decided to treat it as a personal ETF or mutual fund that we would just hold over time.

Original Post:
August 6, 2014: My Wife’s Personal Mutual Fund Outperforms the Pros

Follow-ups:
February 21, 2016: My Wife’s Personal Mutual Fund Crushes the Markets, AGAIN

August 7, 2016: My Wife’s Buy & Hold Strategy Still Crushing the Professionals

November 19, 2017: The Wife’s Stocks Outperforming 3 Years Later

Every one of these companies are a household name selling a product or service that we all use, so naturally, they will grow as a group.

As of November 11, 2018, the 22 stocks have performed as follows (for purposes of the exercise, no trades have been made):

• Total gain of 108.26% (adjusted for dividends & splits)
• 20 of the 22 stocks show a gain
• 20 of the 22 stocks show a double digit gain
• 13 of the 22 stocks show a gain of at least 50%
• 8 of the 22 stocks show a gain greater than 100%
• The leading gainer, also the 2nd highest initial priced stock, is up 448%: Amazon $AMZN
• 2 stocks show a loss: $XOM and $KORS
• A 91% success ratio

As a comparison, the return from the Nasdaq trails by 35%, the DJIA trails by 46% and the S&P 500 trails by 58.5%. In dollar terms, $5,000 invested per stock in the portfolio (or $110,000) would currently sit at $229,088 for a pre-tax profit of $119,088. Alternatively, $110,000 placed in the Nasdaq would result in a pretax profit of $77,178, $64,005 for the DJIA and $49,311 for the S&P 500.

What started as a playful review, became a serious pursuit of stocks that we decided to grab shares in. We don’t own every stock on the list but we do own and have owned many over the years.

I agree with my sentiment from last year, now nine years into a run from the bottom:

I’m not surprised to see, after years and years of gains (pre-2014), that these stocks continue to outperform the general market indexes. At this point in 2017, I believe that many of these stocks will continue to outperform in the years to come (and I’m making this statement deep into a multi-year up-trend).

Many folks and gurus on social media try to get fancy and make predictions to actively buy and sell the next great thing. Perhaps that works (not likely) so why not just accumulate shares in the best companies with the most useful products and services and call it a day. Predictions are fun and subscriptions must be sold so fintwit activity is needed but I bet this buy & hold portfolio has beaten the results of most strategies. And the best part, it’s free.

Howard Lindzon (@howardlindzon or howardlindzon.com) has a very similar list titled 8 for 80 which shares several of the names listed here. What he says about his list rings true for any list:

“No index or list is perfect…and mine will keep evolving. The secret sauce over time is not so much the list itself, but the ability to adjust, allocate and manage risk as you go.”

At the end of the August 2016 update, I suggested changing $KORS (an underperformer) for $MSFT. For purposes of the blog thread, we didn’t change a thing but that one adjustment would have resulted in a 98% gain for MSFT vs the 5% additional loss for KORS. To Howards’s point…”adjust”.

The portfolio of 22 stocks:
$AAPL – Apple
$SBUX – Starbucks
$GOOGL – Alphabet
$AMZN – Amazon
$FB – Facebook
$COST – Costco
$TGT – Target
$TPR – Tapestry (formerly Coach, COH)
$KORS – Michael Kors
$CVS – CVS Health Corp
$NFLX – Netflix
$DIS – Walt Disney Co
$JNJ – Johnson & Johnson
$PG – Procter & Gamble
$V – Visa
$MA – MasterCard
$PEP – Pepsico
$TJX – TJX Companies
$HD – Home Depot
$VZ – Verizon
$XOM – Exxon Mobil
$WFC – Wells Fargo

If you thought my Stock Trends for 2017 list was boring (same old stocks), just wait until you see the creativity of this year’s list. I said this last January 1st:

“Perhaps this list is old and boring (Buffett likes boring) but we’re here to make money, not be sexy.”

So, let’s get into the mind of Buffet, which will explain why I am going to “let it ride” for now…

“There seems to be some perverse human characteristic that likes to make easy things difficult.”

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

“It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.”

Many of the stocks that I profiled in 2017, were the same old stocks that I profiled in 2016 and 2015. Following the trend has worked well so why should I try to get fancy, chasing a few percentage points here and there while increasing my risk? The 2017 portfolio returned nearly 42% and the basis of the setup didn’t include any sophisticated buy and sell rules. It was a simple buy and hold strategy. I’ll take 42% any year, hands down!

The current market run from the bottom in March 2009 will reach nine full years in 60 days. It has been an amazing run with amazing stats along the way. At some point, the trend will end. Unfortunately, no one knows if that will happen tomorrow, sometime in 2018 or at some point beyond 2018.

Take a look at these amazing S&P 500 stats:

• The S&P 500 has had nine consecutive positive return years, tying the all-time record from 1991-1999 (we all know what happened in 2000).
• Every month was positive for the S&P 500 in 2017, setting an all-time record, the first time that has ever happened in the history of the index.
• In fact, the S&P 500 has been positive for 14 consecutive months, another all-time record.
• The S&P 500 has been positive 14 of the last 15 years with only 2008 showing a loss.
• The S&P 500 went 17 out of 18 years from 1982 to 1999, so perhaps there’s still room to run.

On the surface, the S&P 500 stats referenced sound like the end could be near but the famous quote:

“Markets can remain irrational longer than you can remain solvent”

keeps me from trying to guess. The “easy” thing to do is to continue playing until the market tells us otherwise. No one is smarter than the market and it will give signals when it’s over.

So, before I get into this year’s list, I once again suggest that 99% of all investors stick with low cost index funds and skip individual stocks altogether. Individual stocks are funny and carry too much risk for the casual investor.

*NOTE: the overall health of the markets must be positive for many these investments to do well.

Digital Currency & Blockchain:
Digital Currency has been on my list for several years and has worked well. I mentioned “blockchain and bitcoin” both in 2015 and 2017 but decided to ignore them as far as investments. Too bad for me as 2017 was the year of cryptocurrency.

Blockchain started to go mainstream in 2017 and I believe the mania will continue in 2018. The challenge with crypto currencies (coins, alt coins, tokens, etc.) is that 99% of the ones available today will not be here in the future, they are garbage or outright scams. Some may survive and new ones will be created but I suspect the leaders of these decentralized cryptos will start to emerge by the end of 2018. I am far from an expert on cryptos so please search elsewhere for advice on how and where to invest. The hope for crypto (and blockchain) is that the “technology” eventually supersedes the speculation and the intended benefits will be realized. (Disclaimer: as of this blog post, I own Bitcoin, Ethereum and Litecoin).

For a more traditional stock approach, these are the companies that I believe will continue to provide value and further upside through their stock shares:

• V: 114.02. I continue to ride and hold Visa personally as it remains the world’s largest retail electronic payments network and is one of the most recognized global financial services brands. The stock returned 47% in 2017 and has been in an up-trend, above its 50-day moving average since last January. The stock provided a much better entry in January 2017, from a technical standpoint, but I am including again this year. As I said last year: “as a long-term shareholder, I’m holding, until it proves otherwise.”
• MA: 151.36. Like Visa, MasterCard was also up over 47% in 2017 and has been riding its 50d ma since August 2016. The stock is currently trading sideways over the past several weeks, forming a base along the 50-d ma. My ideal buys are closer to the 200d ma but I will include Mastercard until it breaks down. Be careful buying any stock when extended.
• SQ: 34.67. Square, Inc. was the one that got away last year. I went with PayPal (stocked up on $PYPL shares personally and it paid off with an 86% gain, I still own 50% of my original position). Personally, I still like PayPal (the company) but feel that the stock is extended so I am not including this year. I am going to take a chance on Square, a stock that went from $13 per share to as high as $49 per share in 2017. The stock has pulled back over the past five weeks, violating the 50d ma on heavy volume so we have to keep an eye on that (red flag). An ideal area to grab shares would be at or near the 200d ma, as long as it holds support. A violation of the 200d ma would be a big red flag. With all that said, I am going to take a chance on SQ. It carries with it some risk so be careful if you decide to grab shares.

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The results are in and the chrisperruna.com Stock Trends for 2017 outperformed the general market by a wide margin. The discretionary buy-and-hold (mock) portfolio logged final gains that were 48% larger than the Nasdaq, 66% larger than the DJIA and 115% larger than the S&P 500.

Final 2017 Results:

• Stock Trends for 2017: +41.85%
• Nasdaq Composite: +28.24%
• Dow Jones Industrial Average: +25.08%
• S&P 500 Large Cap Index: +19.42%

Final Results Fun Facts:

• 20 of the 21 stocks show a gain for a 95% win ratio
• 18 of the 21 stocks show a double digit gain or 86% of the stocks
• 14 of the 21 stocks outperformed the three main US indexes
• 8 of the 21 stocks gained more than 50% for an average of +69.23%
• 6 of the top 10 gainers started as triple digit stocks (7 ended that way)
• The top 10 performers had an average gain of +65.00%
• The average gain of the positive stocks is +44.39%
• The average gain of the positive stocks, with double digit gains is +49.16%
• BABA was the top performing stock, with a gain of +96.37%
• BABA peaked at $191.75 (52-week high), which gave the stock a +118% gain at the time

As 2017 ends, I maintain a bullish outlook on many of these names, heading into 2018 and beyond.

**Note: Adjusted close price adjusted for both dividends and splits.

Stock Trends for 2017 Portfolio:
$AAPL $AMZN $BABA $BCS $CYBR $FB $GOOGL $HACK $INTC $MA $MBLY $MIME $NFLX $NVDA $PANW $PYPL $TSLA $USO $V $VNTV $XME