Buy on the dip? Sure.

But which dip and when and what stocks?

I think the next few months will be especially treacherous to navigate. Yes, especially, even in comparison to the falling market of the last week or so.

That’s because there will be more than enough volatility to dangle bargain prices in front of your eyes. And then to send some of those bargains down even further into the basement. And there will be enough upside volatility to present plenty of opportunities to buy into rallies just before they fade.

In other words the next few months will be a great time to buy high and sell low.

However, some of the bargains will be real. Investors will get a chance or two or three to buy stocks they’d like to hold for the long term at great prices—if they have the discipline to stick with them during the scariest days. There will be a few stocks that outperform no matter what the overall market does because they dance to their own tune—if you can hear it above the clatter of falling knives. And there will be stocks that have strong long-term trends at their backs, but where the trends have been obscured by the current market volatility.

Let me give you a quick sketch of what looks like a volatile summer and then 10 specific stock ideas to fill out those three categories of stocks to buy on this dip (or the next one.) Read more

A thought experiment in long-term investing: What stock would you buy for a newborn?

Recently—like today—the editors at MSN Money asked me to write a blog post on what stock you should buy for a newborn. I think it’s an interesting thought experiment in long-term investing even if there is no baby shower on the horizon. Below you’ll find that post.

Pampers, check. Binky, check. Goodnight Moon, check.

But what do you give the baby for a portfolio warmer?

It’s an interesting thought experiment for anyone who claims to be a long-term investor, even if there is no baby shower on the horizon. So what stock would you buy if you had a 20-year holding period ahead of you?

Something cheap now because it’s either deeply out of favor or barely a glint in a Sergey Brin’s eye. (Unlike say, asteroid mining.)

Something with a long-term and very solid trend at its back.

And something so stable that it’s certain to be around in 20 years.

So, no Apple (AAPL)—already too expensive and unlikely to king of the technology hill in 20 years.

Gold? Certainly will be around in 20 years and it’s hard to bet against depreciating currencies and inflating prices for the next 20 years. Though even with the recent pullback, gold is hardly cheap and it’s certainly not deeply out of favor.

European stocks? Everybody hates them, but when’s the recovery? Six months (in your dreams but still possible)? Two years? Never? Too unpredictable. Read more

It looks like the rally in shares of Thompson Creek Metals (TC) is over, put to an end by the company’s own fourth quarter earnings report on February 27. The stock had climbed from $5.93 on November 25, the start of the current market rally, to $9.36 on February 3. Today shares closed at $7.29.

I don’t own molybdenum miner Thompson Creek in my 12 to 18 month Jubak’s Picks portfolio http://jubakpicks.com/the-jubak-picks/ anymore (having sold it out of that portfolio on May 4, 2011) but the stock is still a member of my long-term Jubak Picks portfolio  http://jubakpicks.com/jubak-picks-50/.

In the long-term I continue to like the stock as a way to play the growing global demand for molybdenum, a key ingredient in high-strength steel alloys. But I wouldn’t buy more or start a new position just yet.

This quarter is a good reminder that for a mining company growing sales isn’t all that counts. Read more

Sell Deltic Timber (DEL) from my Jubak Picks 50 portfolio

Whoops! Missed one.

When I did my annual update of my long-term Jubak Picks 50 portfolio on January 13, I dropped Deltic Timber (DEL) from the portfolio in my post http://jubakpicks.com/2012/01/13/10-stocks-for-10-years-2012-edition-my-annual-update-of-my-long-term-jubak-picks-50-portfolio/ but I didn’t actually remove it from the portfolio page.

I’m taking care of that today.

I dropped Deltic Timber from the portfolio not because it’s a terrible stock—it’s not—but because I wanted more exposure to the big long-term trends that would work to Deltic’s advantage than I’d get with this company.

Deltic is a relatively small timber company with 450,000 acres of timberland in Arkansas. It produces timber, lumber, and medium density fiberboard. And the company’s real estate unit sells land for commercial and residential development. The company figures that about 57,000 acres of its 450,000 fit into the higher and better use category that means they’re good candidates for the real estate market. (This land is about 12 miles from downtown Little Rock.)

You can see the potential for a company like this by looking at where it is now in relationship to where it was when the real estate bubble was still inflated. Read more

Now that’s more like it. When I dropped Kinross Gold (KGC) from my long-term Jubak Picks 50 portfolio http://jubakpicks.com/jubak-picks-50/ on January 13 I said that what I wanted in a gold mining stock was a company with low production costs and rising production. Kinross, I opined, didn’t fit that bill any longer. (See my January 17 post http://jubakpicks.com/2012/01/17/sell-kinross-gold-kgc-in-my-long-term-jubak-picks-50-portfolio/ )

But my replacement for Kinross, Yamana Gold (AUY) does. The company’s cost of production is at the low end for the industry—at $450 a gold equivalent ounce in 2010–and it has one of the best profiles for increasing gold production among gold miners. That’s why I added it to the Jubak Picks 50 portfolio on January 13. (See my post http://jubakpicks.com/2012/01/13/10-stocks-for-10-years-2012-edition-my-annual-update-of-my-long-term-jubak-picks-50-portfolio/ for all the changes to the portfolio.)

Low production costs for a gold mining company largely hinge on the richness of the ore grades in its mines. Read more