A Master Investor's Best Ideas Now

One of our primary investment advantages at The Motley Fool is our ability to learn about and to learn directly from the most brilliant investors in the world. It's a leading reason why David and I are thrashing the market in our Stock Advisor service. There simply is no community in the world where more investors are helping each other beat the market.

Each month, more than 4 million investors travel to our sites, sharing their greatest ideas and insights with each other. And in our CAPS service, more than 170,000 investors are making stock picks in direct competition with each other. One of our finest investors there is sportz1, who is in the top 7% of all players.

Here's my interview with CAPS member sportz1, an investor with plenty of great ideas.

Tom Gardner: Because you are one of the greatest investors in our Motley Fool community, I'd like to know what are your favorite two stock investments today, and briefly, why?

sportz1: Yum! Brands (NYSE: YUM  ) and Kinder Morgan Energy Partners (NYSE: KMP  ) . Kinder Morgan Energy Partners pays a great dividend and is a master limited partnership. It's well-run, forward-thinking, has great management, and seems to listen to its shareholders. Yum! Brands also pays a dividend and it gives me international exposure. I am getting ready to retire, so the bulk of my investments are with solid companies with free cash flow, good management teams, and dividends being paid to shareholders. When I do retire, I'll have the option to flip the switch, so to speak, and get checks in the mail.

Gardner: Are there any stocks that you are inclined to steer well clear of today?

sportz1: I steer clear of financial stocks as a whole. Like other financial stocks that were or are a part of the Motley Fool Million Dollar Portfolio service, I dumped Allied Irish Banks (NYSE: AIB  ) but replaced it with Bank of Nova Scotia (NYSE: BNS  ) . I don't like losing money but sometimes it happens, especially if you are not paying enough attention to what's happening with some of your stocks and the sector as a whole.

Gardner: Are there any trends that you find particularly compelling or concerning today?

sportz1: Yes, I worry about the trend toward REITs that handle commercial property and still delve into mortgages of one sort or another. Also, the trend toward "green" companies such as First Solar and the like. I'm sure the time will come when these types of companies will reap the rewards, but not real soon.

I invested heavily in CapitalSource (NYSE: CSE  ) knowing it was going to change its direction. The stock price fell like a rock, but I expected it and was ready for it. I still own the company because I believe in what it is trying to do. It seems to have a strong management team that knows what direction it wants to go in and will make it there in time.

Gardner: What has been your worst investment decision and why?

sportz1: Akamai Technologies, Red Hat, and the like before the dot-com bust. Also, not buying 500 more shares of Apple (Nasdaq: AAPL  ) when it was still "reasonable." Then when there was lots of discussion surrounding Apple about paying dividends or perhaps a stock split, I sold two-thirds of my holding in Apple and replaced it with Kinder Morgan Energy Partners, Coca-Cola, Aflac, ONEOK Partners and the like.

Gardner: When investing, do you worry about macroeconomic issues? If not, what do you focus on?

sportz1: No! I recommend staying focused on investing in individual companies. What I stress to the younger ones who seem to like picking my brain about investing is: Do your homework. I don't suggest certain stocks to them, I just listen to what they seem to be interested in and then make them explain to me why they think investing in that company is a good/bad idea. I bought The Motley Fool books many years ago, and they still get dog-eared by the younger ones seeking knowledge. It's amazing what they don't learn in college!

Gardner: What one bit of parting advice would you give to stock investors worldwide?

sportz1: It's not all about making money, it's how you make it and why. It's about educating yourself over a lifetime and keeping the enthusiasm alive no matter what the economy is doing. As long as I'm able, I'll keep my nose and mind in investing of one sort or another. Fool on!

You can see all of sportz1's investment ideas by following this link. And you can see how David and I are using information like this to beat the market by following this link to learn more about Stock Advisor.

Fool co-founder and CEO Tom Gardner does not own shares of any companies mentioned. Coca-Cola is a Motley Fool Inside Value pick. Akamai Technologies and First Solar are Motley Fool Rule Breakers recommendations. Apple and Aflac are Motley Fool Stock Advisor selections. Bank of Nova Scotia, Coca-Cola, and ONEOK Partners are Motley Fool Income Investor choices. The Fool owns shares of Aflac, Apple, CapitalSource, Coca-Cola, and Yum! Brands. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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