Blackrock (BLK), the world’s largest and more diverse investment manager; the firm has chalked...
Be on the Lookout for Pronounced Shifts
10/06/2013 7:00 am EST
Chris Versace is not your typical investor or trader. What's unique is the way he looks for trends and shifts that force companies to change their entire business models.
CHARLES: Welcome to the MoneyShow.com video network. I’m Charles Githler here with Chris Verscace. Chris, it’s an interesting role you play in both the long-term investing and in the trading world. Let’s talk about that first.
CHRIS: Sure. I write a variety of products. The first one I think you have it in your hands is Power Trend Profits. That’s my long-only investment newsletter where we really look at opportunities over the next 12 to 18 months. Our lens for the world is a little different. We tend to look at the intersection of economics, demographics, and psychographics to determine some long-term trends that force companies to change their business models. Some will of course react well and those are the stocks that we want to own, and there are others that will get left behind. They don’t respond to what’s going on. Those are the names that we want to put on the wayside or potentially just take profits in and avoid altogether.
CHARLES: Then in that publication you’re focusing a lot on stocks that are basically out-competing their class, the best in class, and major shifts. Could you explain that?
CHRIS: Well, the way I look at the world is a little different, right? Most Wall Street guys look at the world in terms of retail or tech or some of these others. I’ve come up with these eight great power trends; so always on always connected, scares resources. Again, we look at those intersections of factors.
CHARLES: And the other six?
CHRIS: Yeah, the cash strapped consumer, living longer lives, cashless consumption, rise and fall of the middle class and a couple others. What we’re looking for are these real pronounced shifts that again change the way companies have to act and who is going to benefit. Really if you think about coming out of a recession one of the best ones has been rise and fall of the middle class.
CHRIS: Americans are, the job creation has been tepid at best. Their disposable income is tapped. We’re not really saving. We tend to look for companies that are really positioned to benefit from that so like a company like a McCormick’s MKC has been a fantastic play on that because people cut back and eat at home. You can argue, Charles, that you would want to say let’s go along with McCormick’s and we want to cut back on some of the restaurant stocks like a Red Robin or a Morton’s or a Ruth’s Chris for example that’s going to feel the pain as people cut back. That’s the way I kind of look at the world.
CHARLES: Very good. Well give us some name in that space.
CHRIS: Sure, well in rise and fall of the middle class the one that we have been looking for very well and strongly has been Starbucks believe it or not; more as a play outside of the United States as they grow their presence not only in Europe, but in China. Another one is Mandelez International. They’re a chocolate coffee biscuit company that has great exposure outside the U.S., but when we think of their products here that’s the kind of stuff that people are going to buy no matter what. You know those guilty pleasure stocks; coffee and chocolate.
CHARLES: Well, thank you, Chris. We’ve been speaking with Chris Verscace on the MoneyShow network.
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