What were there three sectors most banged up this week? Yep, pharma, defense, and chip stocks. I was asked what I liked. I like big and with a competitive advantage. That was easy.
For big pharma, how can you not look at LLY? It's the big gorilla and dominates GLP drugs outside of Novo. The other big players don't even have a plan. This is only the beginning of a very long cycle.
Defense? Simple, I like Transdigm, TDG. They are like a mini-Berkshire buying up parts makers for aerospace. Love the secular growth in aerospace, and selling unique parts with little competition is music to my ears.
Lastly, chips. I was pretty clear on this. Nvidia is the only game in town. What, are you going to make a play on the commoditized DRAM market with Micron? Are you going to tell me bedtime stories of relative valuation plays buying QCOM. Maybe ARM looks interesting (it does), but let's get serious. I'm only buying an individual stock, with all the extra stock-specific risk, if my intent to to make a lot of money with a lot of risk. If not, I'll stick to a low cost tax efficient index fund.