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Friday March 20, 2009
IQ Trend's best blue chip buys
In his IQ Trends, an advisory service that focused on high-quality dividend-paying stocks, he looks at his current "Timely Ten" which represent his best current ideas for long-term, blue chip investors. "To be a truly great investor one must have patience. The stock market is moody beast and as such will cause stock prices to fluctuate widely over the short-term. "Over the long-term, however, the underlying value of the business as demonstrated by a consistently growing dividend stream will typically assert itself. 
"When faced with crisis and uncertainty in the economy and the broader market it is imperative to remember that throughout history, high-quality, blue chip stocks have rewarded patient investors. "The long-term building of capital and a growing stream of income from that capital also requires some counter-intuitive investment decisions, such as buying at times of extreme pessimism or selling at times of extreme euphoria. "I know what some of you are thinking, 'that’s easy for him to write.' No it isn’t; my capital are tied to what I preach and we eat our own cooking. "I have learned, however, that to build long-term wealth one must often buy when it is scary, hold through the fear and sell when it appears the markets will never decline again. "To summarize, it is important to understand that periods of market uncertainty can create wealth-building opportunities for the patient, diligent, long-term investor. " In the words of Shelby Davis who created the Davis family of funds; 'You make most of your money in a bear market; you just don’t realize it at the time.” "Meanwhile, we continue to believe that high-quality stocks purchased at historically low-price-to-high-yield offers the best potential for downside protection and upside appreciation. Our Timely Ten is a current list of stocks that we believe will perform best over the next five years. "Do we believe that all 10 will go up simultaneously or immediately? Of course not. Our four decades of research and experience, however, leads us to believe that these stocks, purchased at current Undervalued levels, are well positioned for appreciation. "The Timely Ten consists of Undervalued stocks that generally have a S&P Dividend & Earnings Quality rating of A- or better, and show exemplary long-term dividend growth. "These stocks also offer a P/E ratio of 15 or less, a payout ratio of 50% or less, debt of 50% or less, and technical characteristics on the daily and weekly charts that suggests the potential for imminent capital appreciation. IBM (NYSE: IBM) |
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"While the depth and length of this bear market has yet to be determined, we can write with rock-solid certainty that it will not last forever," says