Get Started — Buy One Stock

There are some investors who, for one reason or another, are out of the stock market.  I hear this story all of the time, usually the result of family matters or an impulsive move to cash.

Whatever the reason, you now have a great opportunity.  I see many stocks trading at prices (defined as low multiples of earnings) that I never thought would be seen again.

You can dip a toe into the water.  There are many good choices, but let me highlight one that has a strong reward and very moderate risk — JP Morgan Chase (JPM).  You get a dividend yield equal to a ten-year Treasury note.  The P/E ratio is well below ten.  Cash flow is good.  Risk exposure is good.  It is trading above the $27 tangible book value, but I do not mind this for this "best of breed" major bank.

Spotting Opportunities

One of my favorite tools for stock research is Chuck Carnevale's site.  Chuck has championed the wise advice that Earnings Determine Market Price.  While we are not seeing the proof of this today, it is a method that has worked over decades.

Here is a small sample of the data on JPM available from Chuck's F.A.S.T. Graphs site.  I love the long earnings history, and the extensive data collection.

Conclusion

In my programs I have a three-year target for every stock in the portfolio.  My target for JPM is over $100.  I find that getting more aggressive than this is misleading and unproductive.  There are many stocks that currently meet this three-year test, and some are more aggressive.

JPM is a good starter stock for people who are thinking about getting involved.

[Obviously, I own JPM for myself and for client accounts.]