42 Investment Picks From 10 Panelists

[view original post]

To the Editor:
Your Midyear Roundtable was perhaps the best ever (“Tipping Point,” Cover Story, July 15). The investment picks were replete with intriguing ideas worthy of further pursuit. What resonated most, however, were the words of wisdom offered by two of the panelists. Scott Black: A “catalyst would be Republicans regaining control of the House of Representatives in the midterm elections.” And Mario Gabelli: “I expect the stock market to start to improve toward the end of the year, as the U.S. election results are in.” A repudiation of left-leaning ideology would provide a very positive backdrop for the individual stock ideas.

Rob Suthe, Bethesda, Md.

To the Editor:
The best pick on this list, accounting for valuation, is Taiwan Semiconductor Manufacturing. The company is projected to increase earnings at a 16.7% compound annual growth rate over the next five years. It has a 56% market share in chip manufacturing. The company has a net cash balance sheet, with an interest coverage ratio of over 100%. It additionally has strong secular tailwinds, such as [demand driven by] the Internet of Things, high-performance computing, the automotive sector, etc. Moreover, with high net margins and an exemplary management, this stock is a no-brainer.

Chris Bentsen, On Barrons.com

Out of Control

To the Editor:
I truly feel it’s a little too late for the Federal Reserve to control inflation (“Fed Finally Is Focusing on the Big Picture in Inflation Fight,” Up & Down Wall Street, July 15). Even if it raises interest rates a full percentage point, it will not be enough to help corporate profits in the near future. Rising rates have eroded investors’ calculations of what their stocks are really worth. With rates on the rise, I’d rather put my money in short-term certificates of deposit than take a gamble on this volatile stock market.

Martin Blumberg, Melville, N.Y.

Food Prices

To the Editor:
Regarding “Food Prices Rose in June. Here Are the Items With the Biggest Increases” (July 13), our local Aldi keeps increasing prices on food, with the highest one being a recent 50% increase on a carton of eggs, while the nearby Dollar Tree, like all of its stores, has increased the prices on just about everything from $1 to $1.25.

Ron Minarik, Mystic, Conn.

“Peaking” Inflation

To the Editor:
During the great inflation of the 1970s, inflation “peaked” several times (“Don’t Buy the Hype. Why Fed Won’t Do a Full-Point Rate Hike,” The Economy, July 15). For a decade with the Federal Reserve, it was go, stop, go, stop. It will not be any different this time. No sooner does the Fed declare victory and start to ease than inflation picks up again.

Ray Noack, On Barrons.com

To the Editor:
A solid recession will get things moving in the right direction again. Yes, the real kind, with people losing their jobs, etc. People who should know better talk about recessions like they’re unthinkable, like nuclear war. Re-establishing the business cycle is the best thing that could happen.

Richard Russell, On Barrons.com

Fear Trumps Greed

To the Editor:
It is the debt and nothing else that will bring global economies and markets tumbling down to the 2020 lows and quite probably to the 2009 lows (“10 Places Where the Housing Market’s Tide Has Turned,” July 14). Defaulting is already under way and will continue to accelerate as the days pass. Global debt compared with global gross domestic product is at a historic high, and nothing or no one can prevent or delay at least 20% of global debt from defaulting, thus debilitating the financial industry to the point where it cannot and will not refinance existing debt, and curtailing new lending drastically. The combination of both will squeeze economies from both ends, and the market will follow suit at an alarming historical speed. Fear is 3½ times stronger and faster that greed. For proof, look at very long-term charts of major indexes.

Carlos T. Baez, On Barrons.com

Business as Usual?

To the Editor:
Estée Lauder is found in department stores along with other quality cosmetics, not in drugstores or discount stores (“Buy Estée Lauder Stock. Shares Could Climb 31%,” July 14). Most of the company’s items are reasonably priced in comparison with others in its category. As more and more women stop wearing face masks, business should resume to normal.

Kathy Rubin, On Barrons.com

To the Editor:
Estée Lauder is one of those “cult stocks” that somehow commands a multiple in the 30s when its earnings increase at less than half that rate historically. Depending on China to “normalize” is not a given, unless that country decides to change its zero-Covid policy. The same can be said for so many other companies that have a heavy reliance on sales in China. At $245, with earnings projected at about $8 for 2023 and $9 in 2024, Estée Lauder’s multiple is still daunting, and high-multiple companies haven’t been treated well of late. I’d rather put my money into a company like Cisco Systems at this point, where there’s a great deal more transparency with its order backlogs supporting a return to higher earnings as supply shortages ease, and a 3.5% dividend to pay you while you wait.

Peter Brooks, On Barrons.com

Send letters to: mail@barrons.com. To be considered for publication, correspondence must bear the writer’s name, address, and phone number. Letters are subject to editing.