Charles Munger says if you buy high-quality stocks at the 200-week moving average, you’d beat the S&P 500. Do any big firms offer this data?

General
41

Sterling said:
What’s your definition of a high-quality stock? That’s the real trick. This advice just sounds like ‘buy the best companies.’ Well, duh.

All you need to do is be better than everyone else. Easy, right?

42

Sterling said:
What’s your definition of a high-quality stock? That’s the real trick. This advice just sounds like ‘buy the best companies.’ Well, duh.

Everyone’s been talking about FAANG stocks since 2017. Question is, did you buy them?

43

@Nyx
Same could be said for AT&T and Xerox back in the day.

44

Zain said:
I tried modeling this using Composer with the top 5 S&P 500 stocks. So far, it seems to work. I’ll expand it to the top 20 later.

The trick is predicting which stocks will be in the top 20 in the future.

45

Nash said:

Sterling said:
@Nyx
Same could be said for AT&T and Xerox back in the day.

And Cisco. And IBM.

Remember when those were the companies to beat?

46

Sterling said:
What’s your definition of a high-quality stock? That’s the real trick. This advice just sounds like ‘buy the best companies.’ Well, duh.

Compound interest is a powerful tool. If you invest $10k with 15% annual returns for 60 years, that turns into $76 million.

47

@Chen
Sure, but why use 60 years? Most people aren’t going to wait until they’re 80 to draw on their investments.

48

Teo said:
@Chen
Sure, but why use 60 years? Most people aren’t going to wait until they’re 80 to draw on their investments.

True, but Buffett’s fortune really exploded in his later years. Compounding is the real magic here.

49

@Chen
Compounding is key, but not everyone has 60 years to wait.

50

Sterling said:
What’s your definition of a high-quality stock? That’s the real trick. This advice just sounds like ‘buy the best companies.’ Well, duh.

Sounds like the CANSLIM method.

51

Sterling said:
What’s your definition of a high-quality stock? That’s the real trick. This advice just sounds like ‘buy the best companies.’ Well, duh.

It’s similar to Buffett’s strategy of buying below intrinsic value. Great idea, but figuring out that number is tough.

52

Sterling said:
What’s your definition of a high-quality stock? That’s the real trick. This advice just sounds like ‘buy the best companies.’ Well, duh.

You could buy the SP50 instead of the SP500. It offers better returns, but with more risk.

53

@Shane
Check out this comparison: XLG has outperformed SPY by 20% since 2005. Worst drawdown was 53%, but SPY’s was 56%. So, yeah, a bit more risk.

54

Gray said:
@Shane
Check out this comparison: XLG has outperformed SPY by 20% since 2005. Worst drawdown was 53%, but SPY’s was 56%. So, yeah, a bit more risk.

That’s the thing—higher risk, but potentially bigger gains. I’m keeping an eye on XLG.

55

@Shane
Honestly, QQQ might be a better option. Tech-heavy, but strong.

56

Gray said:
@Shane
Honestly, QQQ might be a better option. Tech-heavy, but strong.

Good point. QQQ seems to perform better long-term.

57

@Shane
Why are you saying XLG performs worse? It’s been pretty solid.

58

Arin said:
@Shane
Why are you saying XLG performs worse? It’s been pretty solid.

I edited my post for clarity. It doesn’t always do worse, just riskier during down markets.

59

@Shane
You could call it your Nifty Fifty strategy.

60

Bright said:
@Shane
You could call it your Nifty Fifty strategy.

1974 says hello.