Raymond Saleeby is President of Saleeby & Associates, Inc. He has over 38 years of investment experience. He formed Saleeby & Associates in April 2001.
In this 3,228 word interview, exclusively in the Wall Street Transcript, Raymond Saleeby details his investing philosophy and has many top picks to recommend to investors:
“There is always a good time to be contrarian. It’s a question of how many stocks are available to you. But it’s obvious with stocks hitting new highs, it’s harder to find contrarian stocks. But like anything else, there’s many opportunities, not just in this market but overseas as well…
I’ve followed many, many over a period of 38 years that I’ve been managing money. And I used to be, in the 1980s and 1990s, heavily involved in the water business. I thought that was the best business in the world for 30 years.
And I still think it’s a very good business, anything tied to it, whether it be water utilities or water service companies that service different pumps and the like. It’s just a great business. And I made a lot of money, but it was discovered in the last 10 years with the price/earnings ratios and the multiples increasing dramatically. So I’ve shied away from it.
I think the next best business that I found in the last five years — it’s a phenomenal business — is the flavor and fragrance business. It’s termed different names in different areas. But it’s a great business.
The same companies have been around, for the most part, the last 100 years, and the barriers to entry are enormous. It’s a sticky relationship. And it’s a nice business which you want to buy today in an environment where we’re going to have higher inflation.
And as you see higher inflation, your profit margins start to squeeze somewhat with higher material costs, higher labor costs. But you want to buy businesses where you can increase your prices where the customer is not going to jump ship just because you increase your prices to go to another competitor. And that’s why I say it’s a very good business — being the sticky business…
…it absolutely also includes beverages, drinks, foods, better ways to take sugar out of things — it’s basically healthy. It’s a good business during bad times and good times and it’s a business that’s not necessarily mostly American.
For the most part, it’s more European. It’s a business that offers phenomenal future opportunities with developments of new foods.
They’re healthier for you and more natural. Natural ingredients is a buzzword today in any business.”
Raymond Saleeby has some specific names in this sector:
“A business that has done very well that is heavily involved with millennials is the spice business. And you’re absolutely right.
They love spices.
McCormick (NYSE:MKC) has done very well over the years. It’s a company I bought many years ago.
And I’m not recommending it necessarily today, but they have red hot sauces, and those things are booming right now.
The millennials like that. And you’re absolutely right. Many people are looking for different things for food to add flavor that are not necessarily the traditional ones of salt, fat and sugar.”
Another sector that is catching Raymond Saleeby’s interest is real estate:
“Housing — I wrote a special report about it in the last newsletter and did an in-depth analysis. Basically, there’s a shortage of housing right now, and you have several factors affecting that.
One is older people who typically supply a lot of homes to the market for the younger people and next generation — they are staying in their homes longer, remodeling them.
They were afraid of COVID, because it felt like it was a death sentence to go to a nursing home last year. So that’s changing the supply dynamics.
Secondly, you’re finding that costs of lumber are increasing with other raw materials, dramatically in the last year, up 300% to 400% off the lows.
And you can’t find enough labor because a lot of people quit the profession since 2008 when you had the last housing bubble.
But right now, you have more housing affordability from an interest rate perspective than you’ve ever had before. And you also have other institutions like private equity out there and publicly traded corporations that are competing against you to buy a $300,000 or $400,000 house, which makes sense to do that because you can get the rental income to offset it and some growth behind the value of the house itself.
It makes a nice return. So they’re competing.
It’s very difficult for the average person to buy a house today in a hot market, especially because these are cash buyers. You’re seeing many, many overbids right now.
Thirdly, what’s changed housing more than anything else in the last 10 years, I think, is people buying it without seeing the house. And you’ve got such great graphics with Zillow (NASDAQ:ZG) and Redfin (NASDAQ:RDFN) and the like, that people can see what a house looks like.
You can see it in 3D as well. You can find so much more information that before was only for the real estate broker. It’s the same thing happening in our business, the financial business.
The consumer and the client are beginning to be so much more informed than ever been before. It’s mind-boggling how much information they can receive today. And they can receive it accurately and fast.”
Raymond Saleeby has a specific recommendation for investors:
“I think people need to take the Warren Buffett approach. If I were to tell people one thing it is go back and read everything you can about Warren Buffett. He may be the greatest investor of all time.
He shares some of his secrets.
And I followed him for my whole career and I’ve learned an incredible amount from him. His investment advice has been spot on, and he’s a genius. And we’re very fortunate to have him in our lives right now.”
To get all of Raymond Saleeby’s top picks, read the entire 3,228 word interview, exclusively in the Wall Street Transcript.
Raymond Saleeby, President, Saleeby & Associates, Inc.
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