10 Stocks For Midyear 2020

Kass, clinical professor of finance at the University of Maryland’s Robert H. Smith School of Business, is holding onto some longtime favorites (Berkshire Hathaway, Apple, and Microsoft), adding an older pick (Amazon) back into the lineup, and adding six new equities into the mix.

“As a result of the once-in-a-century event – the COVID-19 pandemic and its associated lockdowns – several sectors of the economy performed poorly during the first half of 2020,” Kass says. Transportation, energy, and finance were hit particularly hard.

Four of the 10 stocks Kass recommended for 2020 were directly impacted – Occidental Petroleum, Berkshire Hathaway, Bank of America, and JP Morgan Chase. Overall, the portfolio returned -15.5% (without dividends) over the first six months of the year, compared to the Dow Jones Industrial Average’s return of -9.9% and S&P 500’s -4.7%. The best performers in Kass’s portfolio were Microsoft +29.1% and Apple + 24.2%.

For the second half of 2020, Kass is recommending a 10-stock portfolio.

Its success, as well as the success of the overall stock market, he notes, will depend on the path of COVID-19, future government support measures from the Federal Reserve, Congress, and U.S. Treasury, and the outcome of the November election.

Here are Kass’ 10 midyear stocks to watch:

Berkshire Hathaway (BRK-A): The multinational conglomerate helmed by CEO Warren Buffett has consistently been ranked on Kass’s list of stock picks. Its shares are off its low, but still down 16.9% on the year. Nonetheless, Kass, who has studied Warren’s investments and philosophy for more than 35 years, is optimistic about the stock’s prospects.

Apple (AAPL): Apple also remains in the Kass’ stocks to watch portfolio. It continues to innovate and is a “cash flow machine,” Kass says, noting that Berkshire maintains a $90 billion stake in the tech giant.

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