Whenever you're making an investment, you should think long-term, the returns on your investments may not happen immediately, for example, last year, I expected higher gold $GOLD prices and invested in Polymetal International. Only recently, we're seeing the results.
The first stock which I'm buying in August 2020 is me thinking long-term, that is, China Mobile $CHL . Even though the stock is doing poorly in recent years, this is a bet on China and on 5G. Not investing in China is very risky according to Ray Dalio.
China Mobile is the largest network operator in the world with 925 million users. There are three network operators in China, China Mobile, China Unicom and China Telecom. China Mobile is the oldest with the highest margins. With 5G, the margins are set to increase and even beyond that, a network operator will always be making money. At current valuations, China Mobile is undervalued with a high dividend yield of 6%.
The second stock which I'm buying in August 2020 is Freeport-McMoran $FCX . This is a bet on Copper $COPPER and also a bet on Electrical vehicles and renewable energies, all of which will use a lot of copper. Demand for Copper is increasing faster than supply and there is the possibility of a supply gap in the future. This will increase copper prices.
Freeport-McMoran is a risky investment. It is one of the highest cost producers in the world but the stock is cheap and it is very sensitive to copper prices. Only a small increase in copper prices can make the stock price go up by a large amount.
The third stock I'm buying in August 2020 is JPMorgan Chase $JPM , the largest bank in America. JPMorgan Chase has taken advantage of the low interest rate environment to expand its credit card business. There is a premium on the stock but they have the best numbers compared to the competitors and certainly the best management in the world with CEO Jamie Dimon.
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