Author: Bob Freedland

Covestor model: Buy and Hold Value

Disclosures: Long all stocks mentioned

At the end of September, 2011, the Buy and Hold Model held 18 positions.

I would tend to divide the portfolio into several categories including what I would call the successful e-Commerce companies such as Apple (AAPL), Amazon (AMZN), IBM (IBM), and Cardtronics (CATM), a new addition involved in ATM machine networks. All of these have shown remarkable price momentum as they represent a handful of companies redefining how we do business in this country.

Another group of holdings include consumer products companies like Church & Dwight (CHD), Colgate (CL), Perrigo (PRGO), Smucker (SJM) and Dr.Pepper Snapple Group (DPS). These are niche players that somehow are maintaining their business model through the difficult economic times.

Thirdly, I have a group of retailers that are surviving either by promoting value - such as McDonald’s (MCD), Costco (COST) or TJ Maxx (TJX) - or by representing an area that appears to be relatively immune to any slowdown, including Nordstrom (JWN) which caters to better-off shoppers, or Starbucks (SBUX) which through its international expansion (especially China) and recent restructuring, has returned to growth and profitability.

In addition, PetSmart (PETM) remains strong as Americans resist cutting back their purchases for Fido during any recession.

Finally, a couple of unique holdings fill our the portfolio: IBM has quietly been a strong performer this past year, Fastenal (FAST) is a favorite steady grower selling its nuts and bolts across the country, and Schiff (WNI) has been marketing niche vitamin products like Vitamin D formulations and Krill Oil capsules to a baby boomer generation looking to preserve their health in the face of the march of time.

Each of these companies, besides doing well fundamentally, have been technically strong even during the gyrations of the market. I hope that this portfolio will manage to weather the turbulent market environment but I shall continue to monitor holdings and try to reduce exposure to equities during sharp downturns.