Yesterday was another day of fresh highs on the Dow. I continue to be fearful about valuations, but I seem to be howling at the moon. My review of individual stocks continues to reveal inflated valuations that seem to bear no relationship to reality. And now, everywhere I look, recommendations on AI-related stocks seem to be more sanguine than in the past. The problem that I have is that I am not in a position to take open-ended risks, as I live on a fixed income with monies going out and only dividends and interest coming in.
The trick would be to find a surrogate stock for AI or semiconductors. One such stock is 5NPlus. 5N Plus (VNP) produces ultra-pure specialty semiconductors and performance materials, using proprietary techniques to refine metals like bismuth, tellurium, and indium, serving critical industries such as solar energy (like Cadmium Telluride for First Solar), medical imaging (X-ray detectors), security, and pharmaceuticals. The company transforms mining waste into high-purity elements, enabling advanced technology and sustainable solutions in various high-tech sectors.
The stock trades at a reasonable valuation (relatively speaking, of course), with good growth potential and a business model that is not entirely reliant on AI. It’s had a good run, but nothing crazy.
The question that always remains in my mind is whether I’m overthinking things. No one can control the outcomes of their investment decisions. I can only hope to do the best that I can and manage expectations that I can execute things perfectly.
Relying on financial statements and all of the quantitative analysis seems to have less impact on investment success than simply picking solidly managed companies that you invest in for the long term.
I continued after many years of being a stock market investor, selling when people panic and buying into euphoria. Now in my seventies, I still make the same mistake. I just can’t seem to learn.