State of the Portfolio: Part 1

The stock market is dropping and when that happens, opportunities arise for investors who can buy opportunistically.

But where are the best opportunities today?

The Asymmetric Universe of stocks is meant to be a group of stocks that I’ve researched and feel comfortable investing in because they have a 10x opportunity over the next decade. With that context, I should be more excited to buy every stock if the price drops.

But I’m not excited about each stock equally and there are risks and threats with each company.

I want to take today and tomorrow to level set where I see opportunities in the Asymmetric Universe today. Generally, I’m looking for:

• Good balance sheets that can weather a storm

  • Preferrably a net cash position

  • This can enable aggressive actions like buybacks or acquisitions when the market struggles

• Strong free cash flow

• Good valuations

  • Enterprise value to sales (EV/S) and price to earnings (P/E) will be my measures here

• Durability during a downturn