The Best Is Yet To Come (Continued)

Cover Story, by Mark Robertson, Managing Partner September 1st, 2015

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I knew it would happen. I just didn’t expect it to be so immediate. NVO triggered an alert and I received that nudge I needed.

I knew it would happen. I just didn’t expect it to be so immediate. We discussed the Alert function available for individual stocks in the August edition and I shared my decades-long pursuit of Novo Nordisk (NVO) and the buying opportunity that I’d missed back in February 2015. Fast forward literally a few days … and after we’d discussed and demonstrated this function at an Open Microphone session last weekend … NVO triggered and I received that nudge. It provided an opportunity to sell a wonderful gain in IPC Hospitalist (IPCM) with the proceeds from sale deployed in NVO. Our technical manager, Kurt Kowitz, builds great tools and resources and we can all be grateful that sometimes they kick into gear pretty quickly.

“Success is where preparation and opportunity meet.” — Bobby Unser

If you missed the August cover story, you might consider going back and taking a look. We’ll wait here …

… and now, the rest of the story.

It’s a story that begins with a stock feature on a company named IPC Hospitalist (IPCM) approximately four years ago. In our October 2011 cover story, we went shopping for stocks with Alice Rivlin in our IPCM Solomon Select feature.

It’s relevant because this is the type of smaller, promising and faster-growing company that we discover in places like the Fortune Fastest-Growing Companies, the Forbes Best Small Companies and/or the Hoover’s Handbook of Emerging Companies. Ken Kavula has built a dashboard around the Fortune fast growing company list for 2015 and will feature these lists, the small company shopping and analysis, and his favorites in his October Clubhouse column. For years, we’ve alerted investors to the Forbes Best Small Company list that appears as Halloween approaches every year. In this case, an investment in IPCM has gained 22% (annualized) since then — a period when the Wilshire 5000 advanced 16.8%.

Nudges At Dawn

I’d been waiting … and shopping for a replacement for IPCM in a personal portfolio. And then Wednesday morning delivered a terse but enabling email. “That stock you’ve been wanting? It’s now displaying a return forecast of at least 12%.” (A quick check of the chronicle for NVO reveals that excursions greater than 12% seem to have been relatively rare over the years.)

With a few keystrokes, IPCM is history and NVO is now part of one of my core personal portfolios. I now feel a little better about missing that $40-something buying opportunity back in February — but I’m still simmering a bit.

When January Meets October

We’ve noted in previous columns that the “January Effect” keeps taking shape earlier and earlier in the year. The January Effect is what happens, predominantly to smaller companies, as a result of tax-related selling as the end of the year approaches. The purchase of smaller companies starting January and continuing through Tax Day can often be bolstering to the stock prices.

Investors seem to begin preparing their tax loss capture selling transactions earlier in the years — pressuring small company stock prices during the fourth quarter.

Enter the Fortune list… and the Forbes list … and the coverage you’ll see here at Manifest Investing over the next several weeks. The Fortune Fastest-Growing companies are available via a public dashboard.

We covered the quest for smaller companies during a recent Open Microphone session last Saturday morning and will likely do more on the subject during other educational sessions during October.

Ken Kavula featured Illumina (ILMN) during the September Round Table and we’ve added the company to the Tin Cup model portfolio.

We believe the Alerts function offers an opportunity to discover companies that you’d like to own — and provides the tools to give you a reminder when conditions are met. For companies that you’d like to own, we recommend building a list and setting alerts to trigger based on logical conditions.

Keep in mind that Manifest Investing is one of few places that supports a consensus-based return forecast as a criteria … and frankly, we think this is superior to any price-based approach or virtually anything else out there.

We will also be using the Manifest Investing specific characteristics for existing holdings? What PAR or quality ranking would you like to be nudged about? When a company like Coach goes from a quality rating of 90-something to less than 90, we’ll let you know. Shop. Set your triggers. Succeed.