July 13, 2021
Raymond Saleeby, President, Saleeby & Associates
Raymond Saleeby is President of Saleeby & Associates, Inc. He has over 38 years of funding expertise. He shaped Saleeby & Associates in April 2001.
In this 3,228 phrase interview, completely in the Wall Street Transcript, Raymond Saleeby particulars his investing philosophy and has many prime picks to suggest to traders:
“There is all the time a superb time to be contrarian. It’s a query of what number of shares can be found to you. But it’s apparent with shares hitting new highs, it’s tougher to seek out contrarian shares. But like anything, there’s many alternatives, not simply in this market however abroad as effectively…
I’ve adopted many, many over a interval of 38 years that I’ve been managing cash. And I was, in the Eighties and Nineteen Nineties, closely concerned in the water enterprise. I believed that was the finest enterprise in the world for 30 years.
And I nonetheless assume it’s an excellent enterprise, something tied to it, whether or not it’s water utilities or water service corporations that service completely different pumps and the like. It’s only a nice enterprise. And I made some huge cash, but it surely was found in the final 10 years with the worth/earnings ratios and the multiples growing dramatically. So I’ve shied away from it.
I feel the subsequent finest enterprise that I discovered in the final 5 years — it’s an outstanding enterprise — is the taste and perfume enterprise. It’s termed completely different names in completely different areas. But it’s an awesome enterprise.
The identical corporations have been round, for the most half, the final 100 years, and the obstacles to entry are huge. It’s a sticky relationship. And it’s a pleasant enterprise which you need to purchase at the moment in an surroundings the place we’re going to have greater inflation.
And as you see greater inflation, your revenue margins begin to squeeze considerably with greater materials prices, greater labor prices. But you need to purchase companies the place you possibly can improve your costs the place the buyer shouldn’t be going to leap ship simply since you improve your costs to go to a different competitor. And that’s why I say it’s an excellent enterprise — being the sticky enterprise…
…it completely additionally consists of drinks, drinks, meals, higher methods to take sugar out of issues — it’s principally wholesome. It’s a superb enterprise throughout dangerous occasions and good occasions and it’s a enterprise that’s not essentially largely American.
For the most half, it’s extra European. It’s a enterprise that provides phenomenal future alternatives with developments of latest meals.
They’re more healthy for you and extra pure. Natural components is a buzzword at the moment in any enterprise.”
Raymond Saleeby has some particular names in this sector:
“A enterprise that has finished very effectively that’s closely concerned with millennials is the spice enterprise. And you’re completely proper.
They love spices.
McCormick (NYSE:MKC) has finished very effectively over the years. It’s an organization I purchased a few years in the past.
And I’m not recommending it essentially at the moment, however they’ve pink scorching sauces, and these issues are booming proper now.
The millennials like that. And you’re completely proper. Many individuals are searching for various things for meals so as to add taste that aren’t essentially the conventional ones of salt, fats and sugar.”
Another sector that’s catching Raymond Saleeby’s curiosity is actual property:
“Housing — I wrote a particular report about it in the final publication and did an in-depth evaluation. Basically, there’s a scarcity of housing proper now, and you might have a number of elements affecting that.
One is older individuals who sometimes provide quite a lot of properties to the marketplace for the youthful individuals and subsequent technology — they’re staying in their properties longer, reworking them.
They have been afraid of COVID, as a result of it felt prefer it was a demise sentence to go to a nursing residence final 12 months. So that’s altering the provide dynamics.
Secondly, you’re discovering that prices of lumber are growing with different uncooked supplies, dramatically in the final 12 months, up 300% to 400% off the lows.
And you possibly can’t discover sufficient labor as a result of lots of people stop the career since 2008 while you had the final housing bubble.
But proper now, you might have extra housing affordability from an rate of interest perspective than you’ve ever had earlier than. And you additionally produce other establishments like personal fairness on the market and publicly traded firms which can be competing towards you to purchase a $300,000 or $400,000 home, which is smart to try this as a result of you will get the rental revenue to offset it and some development behind the worth of the home itself.
It makes a pleasant return. So they’re competing.
It’s very troublesome for the common particular person to purchase a home at the moment in a scorching market, particularly as a result of these are money consumers. You’re seeing many, many overbids proper now.
Thirdly, what’s modified housing greater than anything in the final 10 years, I feel, is individuals shopping for it with out seeing the home. And you’ve obtained such nice graphics with Zillow (NASDAQ:ZG) and Redfin (NASDAQ:RDFN) and the like, that folks can see what a home seems to be like.
You can see it in 3D as effectively. You can discover a lot extra data that earlier than was just for the actual property dealer. It’s the identical factor taking place in our enterprise, the monetary enterprise.
The client and the shopper are starting to be a lot extra knowledgeable than ever been earlier than. It’s mind-boggling how a lot data they’ll obtain at the moment. And they’ll obtain it precisely and quick.”
Raymond Saleeby has a selected suggestion for traders:
“I feel individuals must take the Warren Buffett method. If I have been to inform individuals one factor it’s return and learn every part you possibly can about Warren Buffett. He could also be the biggest investor of all time.
He shares a few of his secrets and techniques.
And I adopted him for my entire profession and I’ve discovered an unbelievable quantity from him. His funding recommendation has been spot on, and he’s a genius. And we’re very lucky to have him in our lives proper now.”
To get all of Raymond Saleeby’s prime picks, learn the whole 3,228 phrase interview, completely in the Wall Street Transcript.
Raymond Saleeby, President, Saleeby & Associates, Inc.
e mail: [email protected]