Updated: May 31, 2021
I went on a shopping spree in April. Mind you, not the mall-shopping trip. Nope.
Instead, I went on a shopping spree at the stock market.
I bought 10 shares of Coca-Cola and 10 shares of Kraft Heinz.
Ok, maybe not such a crazy shopping spree. But, I did drop over USD1,000 (CHF900) in one day on stocks. So, I'd still categorize it as a shopping spree! I generally only spend about USD600 (CHF500) per month on my "fun money" investment account (this includes selected stocks and crypto).
Now, why did I buy these two stocks?
Simple. I love Heinz Ketchup on my burgers, so why not invest in Kraft Heinz, as well? It was the same simplistic thinking for the Coca-Cola shares purchase. Of course, this isn't the "correct" way to buy shares. However, I am familiar with both of these companies. I wrote a thorough analysis of Coca-Cola back in business school, and I use a multitude of Kraft Heinz's products and find both companies can weather their respective downturns in business fairly well over the next few months. Most stock analysts would probably run off screaming if they read this (currently, those same analysts say to hold the stock if you've got it, but don't necessarily buy it).
Warren Buffet once said, "Never invest in a business you cannot understand."
And I think he is (mostly) right with that adage. Nonetheless, these two purchases were not made on a whim. Although I understand that most analysts (for this quarter, at least) consider Kraft Heinz in too much debt and has lower profits than last year, I still think it is a good buy to buy and hold in the long-term (more than 5 years). Because of a portfolio of iconic food brands and a huge worldwide distribution network, I think this stock has potential (plus, it pays dividends = passive income).
For Coca-Cola, although I don't drink Coke on regular basis, I do drink it alongside the occasional burger that I eat. However, I wanted to get some exposure to Coca-Cola due to its valuable beverage portfolio, which includes Sprite, Fuze Tea and Schweppes. I must admit, buying some Coca-Cola shares was also a bit of a nostalgic purchase. I associate Coca-Cola with going to the movies, carefree summer nights and blue skies. So, another fail at buying a stock based on proper stock analysis.
Perhaps there is one saving grace for these two stock picks: Warren Buffett has both of them in his portfolio, so they can't be too bad.
What do you think? Do you buy individual stocks? How do you select them?
Let me know in the comments!
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