Let's get straight to it.
Well, they're the only two stocks I own at the moment, and I couldn't feel more at ease holding them.
Why Panera Bread?
After buying Panera Bread (NASDAQ:PNRA.DL) for around $129 -- more or less its high in the summer of 2011 -- you can understand my surprise when the company shed 20% or so of its value. I had inklings of selling the stock early, but I held on because of three things I knew at the time:
1. The company was among the healthiest -- if not the healthiest -- food options.
2. Ronald Shaich was fanatical about growing Panera.
3. Panera Bread had become a "fourth place."
On the first point, I'm not sure if I have to explain. Googling for a few minutes, you'll find plenty of reviews touting Panera as the "Healthiest Fast Food Restaurant." In fact, in 2008, Health.com rated it America's No. 1 Healthiest Fast Food Restaurant.
Second, Panera Bread has Ronald Shaich, its talented founder, chairman, and co-CEO. For those who don't know, before founding Panera Bread in 1993, Shaich co-founded another bakery-cafe chain, Au Bon Pain, in 1981. Now, the history is a bit detailed, but the main takeaway is that Shaich has been in the fast-casual restaurant business for decades. He knows what works and what doesn't.
Finally and most important, Panera Bread is the only other place I consider workable. You know how Starbucks is famed for creating a "third place" between work and home, a place where you can study, talk with friends, relax? Well, sometimes I need a little more than coffee, and sometimes I'm just deathly tired of going to the same old Starbucks everyday. Panera Bread is the "fourth place."
So should you buy Panera today? Well, maybe. For me, I wouldn't.
I still think the company has a great management team as Shaich still holds the same positions. However, the company's product value has declined, in my opinion. Not only do the portion sizes at Panera Bread seem smaller (or they've always been that size and I've grown larger), but the food doesn't have the same finesses or hearty feel it used to.
I am holding onto my Panera shares, though. The company trades at a premium 28 P/E and the company continues to push its stock price higher. Though this may be a risky time to hold, I don't think there's any other restaurant that comes close to being a "fourth place."
Panera Bread makes up $986 of my portfolio.
I bought Baidu (NASDAQ:BIDU) in February at about $96. Since then, the company has shed more than 8%. However, I'm more bullish than ever.
I bought into Baidu because it commanded more than 70% of China's search market even as competition spiked in 2012. Moreover, Baidu has been around for more than a decade; the company just knows so much about Chinese Internet users. And similar to Google search, Baidu search gets smarter and smarter as people use it. As the country's dominant search engine, it's hard to see any company come close to Baidu's 13+ years of user data to make search better.
So even though Qihoo (UNKNOWN:QIHU.DL) continues to gain market share in the search space, I have no fears that Baidu won't come out on top. Perhaps the best way to put it is this: Like other Fools, I think the market tends to underestimate the advantage of first-movers and top dogs.
Notwithstanding Qihoo's weaknesses, I think the search market has been decided for some time now.
Now, that only leaves mobile concerns. On that, all I can say is that (1) again, Baidu is best poised to make the transition as it's one of the few companies with more than a decade of experience tailoring products to consumer habits. You can bet that CEO Robin Li is going to throw all the money he can to make mobile work.
I'm considering buying more shares.
Baidu makes up $877.50 of my portfolio.