It’s that time of year for the annual Invested Dads Stock Draft! This year is special in that YOU, as listeners, can join in on the action. Listen to this week’s episode to hear the rules and strategies of this year’s draft, along with Josh & Austin’s picks. Then, at the end, they let you in on how you can join the draft this year. Listen now to hear all about it!
We’d like to invite you to join us. Our game is named TID 2nd Half Stock Draft 21. To sign up and to join the game right now, click here. The password is donut.
Main Talking Points
[1:59] – Rules
[6:20] – Strategies
[7:23] – Stock Picks
[31:12] – Dad Joke of the Week
[31:30] – How To Join
Links & Resources
Josh & Austin’s Picks – scroll down to the bottom!
Invest With Us – The Invested Dads
Free Guide: 8 Timeless Principles of Investing
Social Media
Full Transcript
Intro:
Welcome to The Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.
Austin Wilson:
All right. Hey. Welcome back to The Invested Dad’s Podcast, a podcast where we take you on a journey to better your financial future. Today, we are going to be talking about the second annual The Invested Dads official second half stock draft. Wow, that’s a mouthful.
Josh Robb:
Wow, that’s a lot of… We’ve got to abbreviate that or something.
Austin Wilson:
TID second half stock draft.
Josh Robb:
Yes. So just recap last year, what happened. I forget?
Austin Wilson:
I owed Josh a donut because he stomped me and the market in terms of his picks.
Josh Robb:
Yes and again as always, these are for fun, there’s no real money involved. It’s not any sort of recommendation because you and I both picked our stocks off of guesses, hopes, and my whole thesis was recovery-
Austin Wilson:
And mine was pandemic.
Josh Robb:
You played more defensive and it played out. So again, as we’re talking through this whole new second annual stock draft, we’re going to talk through some of our choices, not recommendations. We were not suggesting that anybody holds or invest in this. This is all fake money, six month timeframe, short timeframe. So again, not a recommendation.
Austin Wilson:
Yeah and we also want to point out that this is not the way that we advise people to invest their money. We do not advise people to invest their money for six months at a time. If you need your money in six months, these are definitely not things you should be investing in.
Josh Robb:
Right, so this is just a for fun, pick your names competition.
[1:59] – Rules
Austin Wilson:
But, in that light, we are so excited that this year you are going to be able to join us and keep track of your portfolio, your hypothetical portfolio, along with Josh and myself, along this six month competition. There may be some prizes at the end of the year when this is over. So let’s kind of get some rules out of the way and then we’re going to talk about our picks. Okay, Josh?
Josh Robb:
Yes.
Austin Wilson:
So, rules. Upfront, this is going to be taken care of through Investopedia, They have a game section where you can actually have this kind of thing go on. You can create a group and the other people can join your group and then within that group, you compete with each other on the same set of rules for whatever time period you set. So we have chose 100,000 hypothetical United States dollars.
Josh Robb:
Yes.
Austin Wilson:
Those are USD and you’re investing for six months and you’re competing with Josh and myself and other listeners and we’re going to be able to see everyone who’s in, you’ll be to see at any time when you’re looking on the website there, once you’re logged in. There is no margin, so you’re not borrowing money to invest. There’s no shorts-
Josh Robb:
I mean you’ve already borrowed 100,000 of fake dollars, you don’t get to borrow any more.
Austin Wilson:
It’s a 100,000 fake dollars. There’s no short-selling, there’s no options, but where this is a little bit different than last year is that all stocks, mutual funds and ETFs, essentially those three buckets, are fair game. So knock yourself out, do something crazy if you want, that’s fun. You can join any time after the official challenge starts on June 30th.
Josh Robb:
Yep, so starting that morning, June 30th, you can log in to the Investopedia website and we’ll link that all in the show notes, it’ll be there for you or you could just Google it and it’s there. You’ll have to set up your own little account, put a username and everything in there. Then you’ll join our group. You could do this ahead of time by the way.
Austin Wilson:
You can create the account and join the group.
Josh Robb:
You can get everything set up ready to go, but you won’t be able to place trades until 6/30 and on 6/30 or later, you can start placing your trades in your portfolio.
Austin Wilson:
Yes. So another thing to note is that you cannot reset your portfolio completely. So like-
Josh Robb:
If you’re doing really bad, you can’t just start over.
Austin Wilson:
You can’t just start over. So-
Josh Robb:
If I get negative 100,000.
Austin Wilson:
Nope.
Josh Robb:
Well I guess you can’t, because we are not doing margins.
Austin Wilson:
You can’t, no margin, no options. Yeah. So that is kind of where that sits there. Another couple housekeeping items, there are no hypothetical trading costs, which is actually pretty close to real life nowadays and you may trade throughout that six month period. We likely won’t do a ton of that. We’re generally pretty long-term investors and last year when we did this, we stuck with our initial holdings and weightings the whole time.
Josh Robb:
There was some we wanted to get rid of-
Austin Wilson:
There was some we wanted to, and we didn’t. So we have the ability to, and you do too. This isn’t necessarily something that we want everyone spending hours and hours a day on.
Josh Robb:
But you can if you want.
Austin Wilson:
But if you want, go for it. The max that you can put into a single holding initially, so on initial purchase is 10%. So that means out of your $100,000, the maximum you can buy into a holding is $10,000.
Austin Wilson:
And that just allows us to make sure that everyone has some diversification in their portfolio, even if even 10 holdings at 10%, it’s not very diversified, but there’s-
Josh Robb:
Which we found out last year.
Austin Wilson:
Oh yeah. So you get some sort of diversification there. There’s no maximum number of holdings. So Josh and I are holding different number of names and companies and things.
Josh Robb:
I want to buy one and hold the rest in cash. No I’m kidding.
Austin Wilson:
Exactly, and it’s a 1% position. But yeah, there’s no maximum number of holdings but like I said, there’s a maximum weighting in one holding at the beginning, although that can increase over time.
Josh Robb:
Yeah. So if I buy something for 10% and it appreciates, I could end up holding something at a 20% weighting, but my buy-in can be no more than 10%. Got you.
Austin Wilson:
Yep and you will trade on a 20-minute market delay in the software. That’s just what already set up there.
Josh Robb:
That’s part of how it’s built into there, and that will help reduce kind of trying to get little fractional… Since there are no trading costs and no taxes, someone theoretically, if they had all day long, could watch a little price movements, buy and sell and just slowly gain those all the way, which is not a very efficient use of time, in my opinion. For hypothetical money.
[6:20] – Strategies
Austin Wilson:
Yeah. So that is kind of the housekeeping items. When we get through our picks, we will then talk about how you can join and walk you through it step by step. But Josh, let’s just kind of just dive in. We have very different approaches, I think this year, to how this was done. So as a reminder, last year, Josh and I each picked. We had $100,000 and we picked 10 holdings that were equally weighted at the beginning and those were in 10 of the 11 sectors. Then we were stuck with those the entire time and we counted total return for those 10 holdings at the end of the year and that’s how we were. This time, like I said, all of the other rules, you can hold a lot more, you can have different weightings, it’s great. So 6/30 to 13/31, the entire second half of the year, is what we will be measuring performance and total account value, really, is how you’re going to get your total return. So that’s going to have all the dividends and everything included.
Josh Robb:
Do they count the dividends in that?
Austin Wilson:
Yep, exactly. You’re going to get quote-unquote “cash”, you know more cash or whatever, is how that will go. So this year, a lot different. I have quite a few different holdings and a unique way that I’m building this short term portfolio. Josh has done the same and we may have some overlap, we don’t know.
Josh Robb:
We might.
Austin Wilson:
We actually haven’t ran through these lists with each other yet.
Josh Robb:
Brand new.
[7:23] – Stock Picks
Austin Wilson:
So this is pretty fresh. So Josh, kind of get us started here. I know that you have a little bit less number of holdings, so you’ll do one, I’ll do a handful and we’ll kind of go back and forth.
Josh Robb:
Sounds good, we’ll just walk through them.
Austin Wilson:
Kind of give what you’re going to get a position in and maybe just a sentence or two, why.
Josh Robb:
Yep and again, you’ll find out as we go through, these again are not investment options that we’re suggesting should be held in real life. So one of the things, one of my first ones is one I didn’t hold last year, is Activision Blizzard. They were two software gamings that merged together, Activision and Blizzard. They have most notably the Call of Duty franchise, but ATVIs are ticker and I thought, “You know what? I like video games and I want to own a video game company.”
Austin Wilson:
Sounds good. I’m going to get a couple of these, I’m going to call them my other bucket. Out of the way early. So as we mentioned last time, Josh and I literally hold 10 different company stocks. This time it’s open to ETFs, mutual funds, whatever you want to do. I’m going to get a couple of wild cards out of the way, and I’m going to be taking some Patou, positions in the Grayscale Bitcoin Trust and the Grayscale Ethereum Trust. Not huge positions, but some exposure to that because I believe that they’ve both gotten beat up enough that it makes it compelling and as far as the digital store value, I really believe Bitcoin’s going to be only more widely accepted as well as with the tailwind of El Salvador, making it as a form of currency now, that’s kind of big. Ethereum is really kind of the blockchain future of the technological backbone of really the future of the internet.
So I think that those are going to be some upside options for me there. Another, calling on my other bucket, is I’ll be taking a decent position in the ARK Innovation ETF, and that’s Cathie Woods’ flagship product. She’s kind of on the forefront of growth companies and growth investing and her innovation ETF has been sold off pretty sharply as of late and I think that makes it pretty attractive for a long-term holding, but big names in there are companies like Tesla, Teladoc.
Josh Robb:
Companies that are innovating.
Austin Wilson:
Innovating, growing companies, but those have been out of favor and that’s made the ETF out of favor. So I think a decent sized position in that is something I’m going to be holding a position in and my final other category is ticker EDC. EDC is the Direxion Emerging Markets Bull, triple leveraged, ETF.
Josh Robb:
Explain that real quick.
Austin Wilson:
Okay. Yes. So this is a triple leverage ETF for emerging markets. So essentially it’s going to be tracking an emerging market index of sorts. So emerging markets, meaning developing economies, ironically, China is the largest portion of emerging markets around the world, but there’s also places like India and Africa and Latin America that are huge portions of that, but China’s the biggest one. Triple leverage means that when the price goes up, you get three times the daily price return. When the price goes down, you get three times the daily price return. So it’s very volatile typically, but I really believe that this is a way for me without putting a huge portion of my portfolio in it, to get a lot of exposure to what I believe is going to be an area of the economy globally that’s going to pick up some steam at the end of the year. The stock markets and specifically EM have not followed the fundamental story of China’s reopening really and that’s something that I… they’re pretty much, not not perfectly, but they’re pretty much back to normal and they have a huge economy, second biggest in the world and growing faster than ours, so I think that’s why I’m doing that. So that’s kind of an oddball pick. There’s some wild cards in that bucket for me.
Josh Robb:
Just a reminder, again, a triple leverage ETF is a pretty volatile and pretty risky investment. So again, just disclaimer, that’s not something, especially for long-term holding, that’s not necessarily one for a highly volatile place that you want to make sure you’re paying attention to that. But for this type of event, it makes a lot of sense because if you play well and it does well, you’re getting three times that gain that you…
Austin Wilson:
Or you could have a smaller position size to get the same amount of upside. However, so triple leverage, the way that these work is when it’s going the direction that you’ve picked and I picked the bull side of it, meaning I’m getting 3% of the upside, you also get 3% of the downside and 3% of that downside hurts more than 3% of the upside because of the starting point you’re at there. It goes the other way, if you pick like the three times bear, a lot of other ETFs track other index indices with these same sort of situations, but very good disclaimer, not necessarily something to be super excited about, long-term money-wise. But hey-
Josh Robb:
For something like this, it makes total sense.
Austin Wilson:
I lost so bad last year that I’m pulling out all the stops. Josh, what you got next?
Josh Robb:
This is actually a holding I had last time and it’s a holding I like, a company I like just because I like to fly, it’s Delta. Again, going off of that, thinking that they’re going to possibly be seeing more and more flights going out, it should be more better for them. So I’m going to hold Delta. Do you have that too?
Austin Wilson:
Josh, I’m going to own Delta too. I’m going to take not a giant position, but I’m going to own Delta and Southwest.
Josh Robb:
You’re going to go both?
Austin Wilson:
I’m going to pick both sides of the aisle because I recently had a trip where I flew Delta and I flew American. Delta by far provides the best experience. It’s the cleanest and most nice. I like that but I also see the family appeal to Southwest and I think that families are wanting to get out as well as people are going to be wanting to get out who aren’t necessarily on the free luggage side of things, flying Delta. So I’m covering both bases and I’m going to be getting Delta and Southwest. What you got next?
Josh Robb:
All right. The next one is USD Partners, which is a railroad and they do actually railroad for oil and a lot of the kind of energy stuff and part of my choice for that was they just recently announced that the Keystone Pipeline has officially been canceled. So for transportation of that type of equipment, they may see higher demand and their overall got beaten down a little bit and there’s still a lot of demand for energy.
Austin Wilson:
Absolutely. So kind of building on the traveling theme. I have a lot of travel related names in here.
Josh Robb:
What have you got?
Austin Wilson:
Next up I will be taking a position in Boeing, which is a industrial company. However, it’s an industrial company that is selling airplanes to airlines and airlines are going to need a bunch of more airplanes because they’re getting fired back up. So I really feel like… I mean, we were looking… Boeing was 400 and some dollars before all the crashes and everything happened, and the max, but that the potential is still there and it’s trading about 250 right now. So I liked the valuation of that provided that they can get some big orders on those planes. I’m also taking positions in two rental car companies. One is Avis Budget and I just rented a car from them and got robbed, it was so much money. That’s because they’re making good money and demand is high.
Josh Robb:
Its expensive to rent cars right now and do you know why?
Austin Wilson:
Because there’s a shortage.
Josh Robb:
Well, they sold off a lot of their cars during the pandemic to help cover their flow. Now they’re short on cars and they-
Austin Wilson:
Can’t buy new ones.
Josh Robb:
-Can’t buy new ones cause they buy. So yeah, there’s a higher cost.
Austin Wilson:
So I’m taking a position in Avis, but I’m also taking a smaller position in Hertz.
Josh Robb:
That bankrupt company that’s on its way back.
Austin Wilson:
Hertz went bankrupt and they’re going to be coming out of bankruptcy at the end of June. At the end of June, they’re going to kind of reforming themselves. So it’s-
Josh Robb:
Does Reddit have a fa… Are they on the list?
Austin Wilson:
I don’t think Hertz is on there, not yet, but I’m feel like I might be ahead of the game on that one. But I still think Hertz as a rental car company is going to be there. So those are my travel plays. What else you got?
Josh Robb:
You think if you get a flat tire in a Hertz rental car, its a Hertz donut? Like the old game used to do.
Austin Wilson:
That was on How I Met Your Mother. Marshall’s brothers would be like, “Do you want a donut? There’s this place in town called Hertz donut.”
Josh Robb:
Good times. All right. So here’s a new one for me. Nautilus which makes equipment for working out. So Bowflex, Schwinn, and then their own Nautilus brand, but bikes and treadmills and all that stuff. They saw a decent run-up, but I don’t think the trend for working out at home is going to change. I think a lot of people are realizing that that’s the way to go. That that’s cheaper and more easier to do. They also make some outdoor equipment as well. So that’s where I’m going with that one, going with people are going to be more in shape.
Austin Wilson:
That would have been a good one to bring up in our recent Fitness Frenzy episode, where we talked about at-home fitness and how that changed in COVID. So we’ll link that in the show notes too. That was an episode that we just put out a few weeks ago. Next category is oddball. So real estate as a sector, I believe is running in the overbought sort of area of the market. It’s really had a huge run of the last couple months. However, there’s an area of the real estate sector that I think is going to continue to run hot and that is real estate for hotels because of travel coming back. So travel coming back, I think is going to be great. People have money. They want to travel and get out, what they didn’t do last year. Two hotel REITs that I’ll be taking small positions in are Service Properties Trust and Summit Hotel Properties.
Josh Robb:
I also have a REIT, but it’s a more diversified. It’s the Cohen & Steers REIT and it’s the ETF. The ICF is their ticker name, but Cohen & Steers is a fun company. They specialize in REITs and they do a very good job. So I did not have the confidence of Austin to pick, so I thought I’d just let them do their job. So I am going to hold some real estate, but through an ETF that’s diversified.
Austin Wilson:
And that is a great way to get exposure to areas that you are unsure of. That’s kind of the reason that I picked the ARK Innovation ETF, is those are experts in growth and innovation and they pick those for me. Same way that you picked them experts in REITs there. You’re sensing a theme here, but I’m picking another travel company here, Airbnb.
Josh Robb:
It’s just because you got back from a trip. You’re like all in on travel.
Austin Wilson:
I saw how much money this stuff costs. So Airbnb is my next pick. I really think that people are ready to travel and they really should be able to charge whatever they want and people are going to pay it. Another couple bets on the consumer are a little bit different, but Polaris is one. That was one that took off last year as people wanted to get out and buy four wheelers and side-by-sides and yada yada yada, be outside. Well, that really hasn’t slowed down this year. Yes, you just said I was just traveling, but I just had the opportunity to take one of the 1000 CC Polaris RZRs out in the mountains and I want one now, that’s a hoot so I can see the appeal. So that’s one. And then the other side of the consumer coin is Home Depot. I think that them and Lowe’s, I guess for that matter, but I’m not picking Lowe’s should just continue to do well in a low rate environment where people want to spend money and fix up their homes. Construction’s hot, everything’s hot. They should be able to pass on the inflation to the consumer. I think that that’s a good place to be.
Josh Robb:
Okay. I’m going to give you two this time because they go together. They’re called the Local Play. So I have Marathon Petroleum, which has been beat, energy in general is beat down. It’s had a comeback, but there’s still room to go and they’re on the distribution side and the marketing side where I think there’s still less volatile and less relying on oil prices, which are again, mid to upper sixties. So they’re not so worried about that staying there, they’re worried about the supply. More people travel, more people will go that route. So Marathon Petroleum and then Goodyear Tire. They just finished their merger with Cooper Tire and so I have them in my portfolio there as well as just two local and…
Austin Wilson:
Local man. You’re a local guy. I have a couple, I’m going to say, very speculative holdings and I’m not generally a fan of Wall Street bets and things that are going on about around that area of the market.
Josh Robb:
But you’re going to throw it in there.
Austin Wilson:
But I actually found two heavily shorted stocks. These are stocks that hedge funds in such institutions have taken large bets that they’re going to go down. That’s essentially what a heavily shorted stock is in these Wall Street bets, people and traders love these stocks and they just bid them up to try and toast the hedge funds, right?
Josh Robb:
Stick it to the man.
Austin Wilson:
Same thing that happened with GameStop. So anyway, two companies that actually have not yet had a big run-up however are heavily shorted. One of them is C3.ai. It’s a tech company-
Josh Robb:
That’s one of the Star Wars droids?
Austin Wilson:
C3.ai, it’s a heavily shorted software company. It went public in December, lots of short interest in that, hasn’t had a big run. Think that could be a Wall Street bet target, we’ll see about that. Another one is… My numbers are so small on here. Ah, Clovis Oncology, it’s a heavily shorted bio-tech that focuses on cancer treatments. So also wondering if that will get some interest there. Those are some of my, “they’re not going to be big positions”, but they’re my what ifs. And Hey, I could really hit a home run with some of these.
Josh Robb:
With a 100,000 hypothetical money, it’s not a bad risk to take.
Austin Wilson:
Now again, those are another example of, I wouldn’t buy this for… These are not long-term positions people.
Josh Robb:
Nope.
Austin Wilson:
Hypothetical money here.
Josh Robb:
You probably even would be hesitant if our rules where you’d pick 10 and stay, that you wouldn’t even take that because your ability to get out of them when you need to is the key.
Austin Wilson:
I can do that now.
Josh Robb:
And you don’t have to worry about volume because you’re not really trading.
Austin Wilson:
I’m not going to move the market either too. Yeah, exactly.
Josh Robb:
All right. Those are good. So I got a couple here, but I’m going to go with another one where it plays off of your emerging market theme, and so it’s Alibaba. They’re kind of the Amazon of China and so people use that for a lot of transactions. It’s recently been down in value and dropped in price a little bit and so I think now is a good time to hold it and that’s kind of part of my kind of international or emerging market play.
Austin Wilson:
Yep. Next up for me, is Disney. It’s hard to bet against the House of Mouse. I think that just like my travel theme says, people are going to be flocking to Disney on both ends of the coast, especially once California continues to reopen, but Florida’s pretty much-
Josh Robb:
They just launched a new Marvel-
Austin Wilson:
I heard that.
Josh Robb:
Themed part of the resort in California.
Austin Wilson:
That sounds fun, that sounds awesome. As far as Florida goes, they should be pretty much wide open and just printing money as well as the fact that I still feel like Disney+ is going to be even huger than it is now. Loki just launched, that’s something and they’re going to be launching those every week. They’ve got more movies and shows coming out, so I’m going with the House of Mouse.
Josh Robb:
I also have Disney on my list as well as Comcast, which owned Universal. They own Universal and also the channel which hosts the Olympics this year. So hopefully they can-
Austin Wilson:
NBC?
Josh Robb:
Yeah, NBCUniversal and NBC. So all that’s going to play into… So I got Disney and Comcast as my two kind of media plays there.
Austin Wilson:
I have Cabot Corp, kind of going off your tire play. Cabot Corp is a materials company that makes really carbon black, which is a component in tire manufacturing. Ask me how I know.
Josh Robb:
I know. How’d you know that?
Austin Wilson:
I used to work at Cooper. So anyway, I think tire demand is going to be hot as people are traveling more, driving more this year, car purchases, cars need tires. Everything’s good, I think, on that front. So that’s Cabot. A couple quote-unquote “technology” companies. One of them, I don’t know why it’s technically a tech company, but it is. Nvidia. I think they make the best graphics cards in the world. Autonomous vehicles, gaming, mining of cryptocurrency. These sorts of things. Data centers are huge for them. I really think that it goes higher from here. ADP is my other tech pick, so that’s Automatic Data Processing. Now that is a payroll service provider. You may get paid from your employer that way, but what they do is they obviously make money. Essentially, a lot of how they make their money is on the float of the money that people, that companies, give them to then pay. Well, they make money on the interest earned in-between that. Well as interest rates rise, which I kind of feel like interest rates are going to continue to rise as inflation is rising, their floats going to be better, so I think that’s good, as well as we have extremely hot and tight labor market, that’s only getting better. So I think that that’s going to be a tailwind for them as well.
Josh Robb:
Yeah and that float that you talked about, I believe they require the employers to… Let’s say you get paid on the 15th. They require it on like the 10th.
Austin Wilson:
Yeah.
Josh Robb:
Early on and so they guarantee themselves a certain amount of this float, this carry interest that they’re always locking in. Then they have all those additional services they are always trying to sell you that add on additional profit. Good choice. One of the ones I’m doing, and this is a play on the opening back up of everything, is Nike. As people are getting out, being more active, they’re going to participate in that, the sports wear, the shoes, everything as well as, don’t know if you know this, but they’ve started releasing some Space Jam 2 stuff as well, because LeBron is… His endorsements and stuff are with Nike and so some of this Space Jam stuff should be good.
Austin Wilson:
When is that movie coming out?
Josh Robb:
Sometime this year I believe.
Austin Wilson:
I’m ready.
Josh Robb:
So Nike is another one. I’m doing a play on, more of the athletic and outdoor-ness.
Austin Wilson:
So Nike, I didn’t know if you knew this, but Nike owns Converse now and they have for a while. I just got an email or something and Converse is launching like they look kind of Converse-y, but they’re kind of Nike-y with the knit tight fitting, don’t really need to tie your shoe look, chucks.
Josh Robb:
They look good?
Austin Wilson:
They look sweet. I kind of want some, that’s the dad shoe of the world right there.
Josh Robb:
New Balance is, actually. White New Balance.
Austin Wilson:
Nope, I can’t do it. Banking on banking is my next theme. So I’m going to take a position in Bank of America. I just think that’s a well diversified, large bank. Should do well in rising rates. I’m going to take a position in Berkshire Hathaway, technically a financial, lots of insurance operations, also their investment portfolio was well diversified.
Josh Robb:
If somebody… Who is that guy? What’s his name?
Austin Wilson:
Buffet.
Josh Robb:
Buffet, yeah. That’s his name. Yeah. The young guy right?
Austin Wilson:
Well, so Buff… yeah the young guy. So Buffet did name his successor. I also think that took some uncertainty off the table there and they also mentioned that in their last earnings call, that they are receiving price increases, but they’re also passing them on and I like a company that’s able to pass on price increases. So inflation shouldn’t impact it as bad. My last financial is, and I did this last year and it doesn’t always pay off, but I’m taking a position in MarketAxess Holdings. That is electronic bond-trading platform, one of the largest in the world. If you didn’t know, bonds are actually a lot larger of a portion of the entire markets-
Josh Robb:
The entire market is huge.
Austin Wilson:
-in the world than equities even, so I think there’s a lot of potential there. It’s a volatile stock, but it’s down like 24% year to date and I think it’s got to, 52 week lows, it’s got to go up from here. So I think that’s a good play for me.
Josh Robb:
So one of the other ones, and this is similar to your car rentals, is I have CarMax. They’re the largest used car dealership in the US and I think there’s going to be a lot of trading and moving of cars over time and I think they will participate in that.
Austin Wilson:
Sysco. There’s two Syscos.
Josh Robb:
There is which one are you-
Austin Wilson:
Food Sysco.
Josh Robb:
Food. That’s with the S.
Austin Wilson:
S-Y-S-C-O, Sysco. That one is a position I will be taking to get on the restaurant re-opening. Restaurants are going to be re-opening. Sysco provides restaurants with all of their food and I think that they’ll also do a really good job at protecting their margins from the inflation impact and passing those along to consumers, which are then going to be passed on long to the ultimate restaurateurs.
Josh Robb:
To us.
Austin Wilson:
So yeah, I think that that’s a good play there. My energy pick is Magellan Midstream Partners. Another one I had last year, but I really think that midstream area of the energy market is going to be least impacted by fluctuating oil prices, but also with the pipeline plans being shut down, the ones that are in place are really going to be in demand. So like you I’m picking something in the middle. I like that that is there.
Josh Robb:
They have a nice dividend yield too.
Austin Wilson:
They have a nice dividend yield.
Josh Robb:
All right, I’m going to go with underwear.
Austin Wilson:
Underwear!
Josh Robb:
Hanes brand and that’s a play-
Austin Wilson:
Michael Jordan!
Josh Robb:
-on the kind of staple side of things. The more valuable stuff.
Austin Wilson:
Oh they’re a staple.
Josh Robb:
They are a staple. You’ve got to have them. I think they’re a little bit undervalued and so there’s a good spot there and they’re one of those again, value oriented. They’re always around, they’re stable and so there’s a play on that side of things.
Austin Wilson:
How many more do you have Josh?
Josh Robb:
I think I have two more? Three more.
Austin Wilson:
Oh wow. I only have one. I’ve gone through them quick.
Josh Robb:
Well my two kind of go together, so…
Austin Wilson:
Go for it.
Josh Robb:
So these fall into your bucket of kind of other, and so I kind of saved those for last. I’m also going to do the Ethereum Trust Grayscale, ETCG is the ticker on that one. Between the two-
Austin Wilson:
ETHE.
Josh Robb:
Whatever it is. I thought it was ETCG, it doesn’t matter. I wrote it down wrong probably, but it’s the Ethereum Trust and that, like you said, it’s just a play on the digital currency, cryptocurrency. Between the two, I picked Ethereum, I don’t know. That’s how much thought goes into these sometimes for me. The second one is VEU, which is the All-World ex-US. It’s an iShares and that is everything but the United States. So again, I have a lot of US holdings here, but I wanted some international because like you mentioned, there’s a lot of undervalue out of the US. The US is a little over-valued compared to the rest of the world and so to capture a little bit of that play, I’m going to have some weighting in the ex-US All-World index.
Austin Wilson:
Awesome. Well, is that it for you?
Josh Robb:
I’ve got one more.
Austin Wilson:
Okay, we’ll wrap up with you. My last pick is Merck. So Merck is a healthcare company that just spun off kind of the old school legacy portion of their business in a company called Organon and what’s left should be a more growth focused, innovation focused, healthcare company. They’re also not doing so great, year to date and that’s okay because I think that they should be able to pick up now that they’re more growth oriented. Their cancer treatment product Keytruda is kind of state of the art and I think that that should propel them.
Josh Robb:
All right. My last one plays off of actually the digital and cryptocurrency, it’s Coinbase, which just had their IPO earlier this year. It’s down about a third from where it IPO’d to like 30 to 40% down. So I just think, again, as cryptocurrency, they’re kind of the known holder of cryptocurrency and they’re now publicly traded so my play in on that is that I think there’s a lot of upside, at least to get back to their initial price, maybe, but that’s where I’m going with my last pick.
Austin Wilson:
So everyone, as you could see, in here we have very different approaches to how we’re thinking about this. There are some common themes, a lot of common themes around… I think cryptocurrency is a common theme. It’s obviously real now, it’s becoming more and more prevalent, even in normal financial discussions. Themes around travel and re-opening, very, very common, as well as just what we expect things to look like in the economy going forward. So that’s kind of where we’re at. We’re going to post at least the names of our holdings in list form in our show notes or something like that, so you can see. We are going to have various weightings associated with them when we buy them in the portfolio and you’ll be able to see those when you log in and see it as well.
Josh Robb:
You’ll be able to see each other’s and how things are going.
[31:12] – Dad Joke of the Week
Austin Wilson:
Exactly. So the question then is, Josh-
Josh Robb:
First.
Austin Wilson:
What is the dad joke of the week?
Josh Robb:
Let’s do a dad joke.
Austin Wilson:
That’s the question.
Josh Robb:
All right. This is informational. In Hawaii, you’re not allowed to laugh really loud. You know this Austin, don’t you?
Austin Wilson:
I know this one!
Josh Robb:
Yep, it’s just a low Ha.
Austin Wilson:
Just aloha.
Josh Robb:
That’s good times.
Austin Wilson:
That’s classic.
Josh Robb:
I love that one.
[31:30] – How To Join In
Austin Wilson:
But the real question is…
Josh Robb:
Yes. How do you sign up for this?
Austin Wilson:
How do you sign up for this? So, first of all, in the email that we sent out this morning, in the Facebook post we’re putting up today, maybe a tweet, maybe an Instagram post, all of the social medias, or in the show notes below, or on our website, you will be able to click a link that goes directly to the group that this will be hosted in on Investopedia.
Josh Robb:
Yep.
Austin Wilson:
So do that, create your account. You’ll just need an email and a password just like normal and then every time you log in, it’ll have your stuff saved and you’ll be to see everything and compete with us and check where everyone’s at all the time. The password, there’s a password. This is a private group.
Josh Robb:
Private group.
Austin Wilson:
The password is, it’s all lowercase-
Josh Robb:
All lowercase.
Austin Wilson:
Donut.
Josh Robb:
Donut.
Austin Wilson:
D-O-N-U-T.
Josh Robb:
Donut.
Austin Wilson:
Donut. That is the password, so remember that.
Josh Robb:
You only need to know it the once, just to join the group. That’s it.
Austin Wilson:
Ideally, get your picks in on 6/30. So this is starting on 6/30 because it runs, this competition, 6/30 to 12/31. You cannot, because I tried, to test it out. You can not put anything in early and then have it hit. Nope.
Josh Robb:
Nope.
Austin Wilson:
6/30 is it.
Josh Robb:
Got to trade it on the 30th, or later.
Austin Wilson:
Exactly. So June 30th or later.
Josh Robb:
I’m going to dollar cost average in.
Austin Wilson:
You’ve got a hundred grand. You’re just going to divide it up.
Josh Robb:
Yeah, average it for the next six months.
Austin Wilson:
Email us at hello@theinvesteddads.com when you have loaded your portfolio. We would love to know who is competing with us in this and then we can kind of talk to each other as this is going on and if Josh has a really good day or a really bad day, we can give him some crap. That’s kind of how it’s going to go. So we’re super excited about this, I think this is a step in the right direction towards engaging with you awesome listeners who listen to us week in and week out. This is just a fun way to kind of have some good banter going on.
Josh Robb:
Yeah, it was fun for us last year and we thought, “Boy, it’d be great if we had some more people to participate in this” because just Austin and I, depending on the day, who knew what was going to happen, but now there’s a lot of people and some more flexibility, it’ll be fun to see what your guys’ ideas are and themes are and how you guys are trading as well.
Austin Wilson:
If you like this, the way that this works, it’s very easy to replicate this, year, over year, over year. So hopefully in 10 years, we’ll be having the 11th annual the official second half stock draft Invested Dads. I don’t know.
Josh Robb:
Ah man, we need to shorten it.
Austin Wilson:
The long description. As always check out our free gift to you. It’s a brief list of eight principles of timeless investing. These are overarching investment themes meant to keep you on track to meet your long-term goals. Investing with fake money doesn’t really get you there. So that’s not going to be on there, but check it out anyway. It’s free on our website. Josh, how can people help us grow podcasts?
Josh Robb:
Make sure you subscribe, that way you get our most recent episode every week. Leave us a review on Apple Podcasts and email us any ideas, thoughts, questions, or if you have any problems with the whole getting set up on there, shoot us an email at hello@theinvesteddads.com and make sure if you know anybody that’d be interested in this, again, if it’s after 6/30, you could still join. There’s not a cutoff. You can join anytime between 6/30 and 12/31. So let your family and friends know, send them this episode, get them hooked up on the Investopedia page and we’ll see what happens at the end of the year.
Austin Wilson:
Yeah. Let’s make this thing as big as possible. So anyone at all that you think might be interested, send them our way.
Josh Robb:
Who knows, there may be a prize at the end of the year.
Austin Wilson:
Exactly. There’s likely to be donuts involved.
Josh Robb:
Yes. At least donuts, maybe something else. All right, we’ll talk to you later!
Austin Wilson:
Until next week! Bye!
Outro:
Thank you for listening to The Invested Dads Podcast. This episode has ended, but your journey towards a better financial future, doesn’t have to. Head over to theinvesteddads.com to access all the links and resources mentioned in today’s show. If you enjoyed this episode and we had a positive impact on your life, leave us a review, click subscribe, and don’t miss the next episode. Josh Robb and Austin Wilson work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin, or any podcast guests are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses, which would reduce returns. Securities investing involves risk, including the potential for loss of principle. There is no assurance that any investment plan or strategy will be successful.
