Eddy Elfenbein — How to construct a high-quality stocks portfolio using fundamental analysis

Smarter Trading Podcast Episode 15

Our guest today is Eddy Elfenbein. Eddy has been a leading writer in the financial community since starting the Crossing Wall Street website and CWS “Buy List” in 2005 and 2006, respectively. He often appears on CNBC and Bloomberg, where he shares his insights on the market and the economy. 

In this episode we talk all about constructing a high quality stocks portfolio. This has nothing to do with technical analysis, Eddy walks us through how to find value by looking for companies with pricing power, consistency in earnings, strong operating margins, and clear competitive advantages.

Eddy breaks down the process he uses to craft the CWS buy list every year and shares his thoughts on a few of the companies currently on his “Buy List”.

If you’re someone looking to sharpen your fundamental analysis, this one’s for you. 

Please enjoy this episode with Eddy Elfenbein.

This episode is sponsored by Investor’s Business Daily

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Watch the interview in video here

Episode show notes and Eddy’s book recommendations

• One Up On Wall Street: How To Use What You Already Know To Make Money In The Market Lynch, Peter Amazon.com: Books

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Key learning points & timestamps

• 0:00 Introduction
• 2:35 Fundamental Analysis: Middleby Corporation – MIDD
• 5:20 Crossing Wall Street Buy List methodology
• 9:15 How to think about selling stocks you own
• 13:00 AdvisorShares Focused Equity ETF – Ticker: CWS
• 16:00 Eddy’s background and how we came up in the industry
• 19:40 The process of constructing the ETF and building a portfolio
• 27:25 the edge in looking at smaller cap companies
• 32:20 Separating the numbers from the story, outlook, & intangible assets
• 38:00 The world’s simplest valuation model
• 42:45 The role of the global macro environment on a stock picker
• 44:35 Tips for do-it-yourself traders building their own portfolio
• 50:35 Fundamental Analysis: Heico – HEICO
• 51:45 Fundamental Analysis: Miller – MLR
• 53:15 Resources for fundamental investors
• 55:30 Diversification is overrated & stop paying so much attention to the Fed

Highlight clip: Evaluating company fundamentals for long-term holds