Hello Aluxers & welcome back to a very different Sunday motivational video.
We’ve never done one of these before, but since this is an extraordinary time in history,
we’ve decided to share with you our own investment philosophy during these troubling times.
Although most of our investment portfolio is in index funds over the past 2 weeks we’ve been keen to make a play on the stock market,
so what better way than put our money where our mouth is, purchase 15 stocks and make this video about it.
Right now the market is incredibly volatile, making it a great opportunity for investments.
Before we get started, we just want to make something clear.
For us, this is disposable income, meaning that we are more than comfortable with losing our entire portfolio
and all your stock investments should be treated as such.
Do your own research and assess your own levels of risk.
The bulk of our investments are in businesses and real-estate, but we like to diversify and make the most out of each opportunity coming our way
and right now the stock market is looking very appealing and we want a piece of that action.
You will see that the big 4 categories of stocks we purchased are:
Our core philosophy for this investment is that most of these companies are facing a temporary decline in revenue due to the pandemic,
but 12-18 months from now, when everything goes back to normal, we should see the stock price jump right back up.
Also important: we’ve set a dedicated budget for this investment and used only 40% of it for this first round of investment.
If the market goes up, we’re making money.
If the market goes down, we’re ready to purchase even more in order to drop the portfolio price.
You can use any investment platform you like; we’re not paid to endorse any one of them; see what works best for your geography.
With that said, here’s are 15 stocks we purchased during the pandemic:
The stock is at a 5 year low, with big projects in the pipeline.
It’s a big media company and many of you are familiar with the brand.
They recently got acquired by Disney and although the last couple of movies weren’t that big of a hit, they’re still solid in the industry.
At the end of last year, the stock was trading at around $37 per share and we don’t see why 12 months from now the company wouldn’t get back on top.
Airlines are a big question mark these days with many industry experts fighting against one another when it comes to which direction the market is going to take
and how big the government bailouts are going to be
Our thought process is as follows: airlines are temporarily disabled due to the pandemic, but once this is back,
not only we will see a boom in tourism, but they will return to providing the service they’re known for.
At the end of last year, the stock was trading at around $28 per share.
If these airline companies don’t go bankrupt, there’s a lot of up-swing to be made in the next few years.
CitiGroup is and has been a big international player in the banking world and although we’re on the brink of a recession,
we wanted some skin in the game.
Banking and mortgage stocks are the ones we’re most worried about, because this could take a turn for the worse
and CitiGroup has been hit dramatically in the financial crisis of 2008
- when the stock price dropped from $500 per share to only $15.
Right now the stock is at a 5 year low, but we’re keeping a close eye on it.
Another very controversial airline on our list of stocks.
While looking into airline companies we were fascinated by just how fragile the entire business model is for them, especially now.
Delta is losing approximately $60 million dollars per day right now with air traffic coming to a stand-still.
In terms of sustainability… Delta has over $20 billion in liabilities and only $8 billion in current assets.
Basically, if they can’t survive the virus within that 8 billion dollar margin, the company is going under - or unless the government steps in.
And Delta’s situation applies to almost every other airline company out there, with most of them having little to none money coming in,
hemorrhaging money, with more liabilities than assets.
But, this is the reason why although we bought in, we didn’t go all in and we’re closely monitoring the situation.
Depending on how the pandemic situation is evolving, we’ll jump in and buy considerably more or take the L and focus on the rest of our portfolio.
At the end of last year, the stock was trading at around $60 per share.
For us, the luxury hotel industry is an all-time favorite, mostly because these companies own highly valuable real-estate properties.
To put it simply, once the pandemic is over, the company still has the incredible hotels.
But, of course the company is taking a hit right now as nobody is travelling anymore,
but there is little to no reason why things shouldn’t pick up speed once this is all behind us.
As many of you might know, oil prices are dropping like crazy right now.
The economy is at stand-still, nobody is buying gas, thus the drop in demand and price.
Many oil companies are struggling right now sitting on a large inventory.
Marathon to us looked like a pretty decent bet on the short term.
This is the all-time low of the company with a price per share lower than we’ve seen in the 80s for them.
At the end of last year, the stock was traded at $13.5 per share.
A big chunk of our investment went into hotels & resorts.
MGM is one of them for the same reason we pick up HILTON & Marriott
and so far it has been our second-best performing stock with over 40% returns in 1 week,
mainly because other people are speculating the stock as well;
at this rate we are more than comfortable with selling at least some of the stock and moving that additional money into an index fund.
At the end of last year the stock was trading at over $30, so there’s definitely some room for growth when this is over.
This was one of the most exciting purchases for us and the main reason we decided to do this round of purchasing.
Marriott has been a staple in the luxury hospitality industry, a highly respected brand with a solid portfolio of properties all around the world.
When the entire industry started going down due to the pandemic we wanted in.
Marriott closed 2019 being traded at around $150 per share.
We love Levi’s.
They make some of the most comfortable clothes and in the past couple of years they’ve made a big push into solidifying their brand
- that’s why you see more and more people rocking their t-shirts everywhere you go.
For us, Levi’s and Marriott both follow the value investment frame of thinking.
Before the whole pandeming came to be, the company was being traded at around $20 per share, so to us it looked like a no-brainer
and it might be one of the best stocks we’ve bought.
This is one of those wild bets we’ve made just to spice things up in our portfolio.
For those of you who played the board game Cashflow by Robert Kyosaki, this kind of share price might bring back some memories.
The company has a great track record for the past 10 years
and we got super lucky that the price was hitting an almost perfect bottom while we were on our shopping spree.
Just to put things into perspective, at the beginning of the year the stock was being traded at around $15 per share.
For those of you who are excited about maybe jumping into the stock market yourselves after watching this video,
we strongly recommend you pick up the following book UNSHAKABLE by Tony ROBBINS as mandatory reading before you buy anything.
In it you’ll understand basically our investment strategy right now and it outlines exactly how the rich are making bank every time there’s a recession.
In order to Save your money to buy stocks, go to alux.com/freebook and sign up.
That way you get the audiobook for free thanks to our friends at audible,
listen to it, take notes of what makes sense to you and then go shopping for your favorite companies.
With JetBlue, we believe we got lucky again and maybe we should’ve purchased more,
but the same as with delta and American airlines we’re taking our time to see what happens.
Many of these US companies have been actively purchasing back their stock in the past couple of years pushing their stock-price up.
Now when things go south, they lack the money to survive it and are looking to the government for support.
This is something we don’t really like, because if this happens to you as an individual - where you’re carelessly spending your resources just to show off
- there’s no government stepping in when things don’t go your way.
We believe most of these companies will indeed get a bailout but will be in the detriment of the shareholders.
Depending on what’s going to happen we’re keeping or letting the airline stocks go.
At the end of last year, JetBlue was trading just under $20 per share.
We decided to take a chance on this one, because of the all time low price per share with the same reasoning as with Marathon.
There’s a fairly high likelihood that the price will slowly climb back as the demand for crude oil returns to normal.
At the end of last year, Murphy oil corporation was trading at $25 per share.
We like LG, most of our rental properties use LG tvs and we’ve been fans of the company for a long time.
With an established brand and at the forefront of TV innovation, LG is one of those bets we’re really excited for.
Although not directly impacted by the pandemic,
the stock price took a dive as with everything else so we decided to swoop in and diversify our portfolio a bit.
The company has been struggling for the past 2 years and LG was a stock we’ve had our eye on for some time.
We can’t wait to see if they’ll be able to pull through.
At the end of last year, the stock was trading in the ballpark of $6.50, but a couple months before that they were in the double digits.
We always liked Ralph Lauren as a brand and company.
It’s entry-level luxury with a steady customer base.
Although we feel like the company has been struggling to adapt to this new age of consumers, there’s definitely value in the brand.
Before the pandemic, the stock was trading at $120 per share.
In our view, the people who were regular shoppers at Ralph will not change their buying habits 6 months from now when this blows over,
so we’re excited to see where the stock goes.
The last stock we purchased is UnderArmour.
Most people are familiar with them, they’re struggling to compete with the likes of NIKE & Adidas, but we believe they’re doing a phenomenal job.
Everywhere we go we see more and more people embracing under armor as a viable alternative for athletic wear.
We believe in the brand and their ability to keep being creative and agile in this market.
It doesn’t hurt that at the end of last year the stock was traded at $21 per share.
We’ve spread the investment as 40% Hotels and the rest of the industries getting 20% each of our budget.
Important to know, is that we’re waiting on the sidelines, ready to purchase another round if the prices go down even more than our entry price.
Although we’ve invested in index funds before, this is the first time we’re doing straight-up stock picking and we’re excited to see what happens.
We know many of you have considered giving the stock market a go, so we’re curious to know:
Let us know in the comments and maybe we’ll do another one of these videos a couple of months from now as an update.
As a thank you for watching this video until the end, you’re getting a bonus:
All this chaos with the markets has yet to have a direct impact into the price of real-estate.
Every dollar we make from our companies, either gets reinvested in said businesses or is invested in real estate.
As of right now, we’ve stopped acquiring new properties and are waiting for the market to react.
If things go well with this 15 stock experiment, 6 to 12 months from now we’re going to liquidate our stock portfolio and buy a new property.
Here’s where things get interesting.
Most of the stocks we purchased in this video have suffered at least a 50% drop in the past 30 days.
In 12 months we expect most of these stocks to recuperate most of their value, but by then the real estate market will see it’s very own drop in prices,
with some experts saying it could drop as high as 50%.
If our financial experiment is correct, every $1 dollar we put in stocks right now will be worth $4 in real-estate 12-18 months from now.
This is something the rich have been doing every time a financial crisis came around and we’re eager to see if we can pull it off as well.
That’s how you use crises to multiply money - if you plan to do the same, please write the word MULTIPLY in the comments
so we know you’ve made it this far in the video and found it valuable.
Of course, we still have to wait and see what happens!
In the meantime, stay safe, take care of your loved ones and hopefully, we’ll all come out of this a little bit richer.