Hedge fund manager James Altucher has organized his investing philosophy largely around a desire not to worry.
"In markets like this, which go up or down 5 percent a day, it's too stressful to be staring at a quote screen," he says.
Even in rough economic times, however, he has a method he says can help investors rest easy at night: Focus on lasting demographic trends.
"There are these enormous demographic changes that are occurring across the world right now that are almost like tidal waves behind certain companies," he tells Madeleine Brand. "Invest in these companies now; you can ride those tidal waves. You don't have to worry; you can hold them forever."
In his new book, The Forever Portfolio, he explores how to ride these "tidal waves" to financial security. You can hear his interview with Brand in the audio above. He also offers his top 10 list of "forever" investments below.
1.) Obesity: This trend is never going away. People get more and more obese and some $30 billion a year in obesity-related costs are sucked out of GDP each year.
Specific pick: RMD, ResMed, is my favorite play in the space. It makes the masks that detect and help prevent sleep apnea, which is a condition that results when the neck is obstructed from breathing at night because of fat. This will not be affected by the economy, the stock market, a housing slowdown, etc. The more people weigh, the more people need sleep apnea masks, and RMD is the leader.
2.) Identity theft: The number of reported instances of identity theft per year hasn't had a single downtick in 20 years, and it's only getting worse.
Specific pick: Intersections (INTX) provides various services related to identity theft: credit screening, analysis of unusual credit activity, identity theft recovery services, etc. It trades for just three times cash flow and has been destroyed in this market, but long-term it is a safe bet.
3.) Money management: There's $100 trillion in wealth on the planet and someone needs to do the job, even if there's volatility along the way.
Specific pick: Goldman Sachs. Let's not forget which company has, so far, been "the last man standing," and it rules the world at this point: Bush's Treasury secretary, Clinton's Treasury secretary, the president of the World Bank, president of the Canadian Central Bank, governor of New Jersey, Bush's chief of staff, former director of the National Economic Council, and the list goes on. Warren Buffett is in the stock at $120, which is almost double where the stock is now. Time to buy and hold forever.
4.) Women's legs: A topic very important to me and 6 billion other people. As women reach the age of 45-55 (and every year in the U.S. that demographic gets several million people larger), they deal with issues ranging from varicose veins to "what do I do with that tattoo I had put on 30 years ago that's now all flabby."
Specific picks: RFID lasers are the trick — and the leaders are Cynosure (CYNO), trading for just six times earnings, and Cutera (CUTR). Cutera is interesting because the entire company trades for a $100 million market cap, but it is profitable and has $98 million cash in the bank and no debt. So you get the entire company, in an important demographic space, free.
5.) Clean water: Half of the hospital beds in the world are filled right this second by people suffering from diseases related to unclean water. While the world's population has doubled, our use of water has tripled since 1950. And how much more water is there to drink? Zero. Consequently, ever larger portions of the planet are using water that is deemed unsafe by current U.S. standards.
Specific pick: IDXX, Idexx Laboratories, has a growing division that detects biological contaminants in water. This is not only a clean water play but a terrorism play. Additionally, it has products that help diagnose illness in animals, meaning it is good to cats — a nice bonus.
6.) Auto safety: Last year there were over 1 million auto-related deaths. That number is only increasing as people all over the world participate in the rural-to-urban move that is taking place in all emerging economies.
Specific pick: Autoliv (ALV), with a 7 percent dividend, is the leader in auto safety. It has the patents on air bags, seat belts, etc. The U.S. mandates all of these products be put in cars, and other countries are only beginning to do so. When they do, they go to Autoliv.
Consolation prizes:
7.) Chocolate
Specific pick: HSY
8.) More clean water
Specific pick: CCC
9.) See better
Specific pick: LUX
10.) Avoid pandemics
Specific pick: GENZ
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