Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
scared of losing their jobs then and cruise ship activity was low. Now
they’re going gangbusters. I don’t expect a depression in the next
couple of years, so it should be smooth sailing for this company.”
Viewing what was going on in his own industry led Papp to another
one of his top holdings, State Street Bank. “I was looking for something
that would benefit from the stock market’s continued rise,” he
explains. “Forty-three percent of all mutual funds house their assets
with State Street. The other thing that makes it great is the company
has gone abroad in a major way. It is becoming a world leader in the
custodian business. If the globalization trend continues, as I expect
it will, this company will be a big winner. The other thing I noticed
is that State Street used to sell at a bank multiple, but it’s not a traditional
bank. Wall Street is beginning to realize that, and the multiple
has expanded.”
Like a kid in a candy store, he goes on to talk about another trend
he’s been following. “Right now, we’re looking at a company that I
think may turn out to be a great stock,” he exudes. “It makes these
little connector boxes that you plug computers into to protect against
power surges. Our country has been blessed in that we don’t have
many brownouts or power failures. But in about three years, I guarantee
you we’re going to have them. As our utilities become competitive
and nonmonopolistic, they will start competing, and that will
cause a number of problems. But forget about the United States.
Computer sales are picking up in Europe, Africa, and southeast Asia
too. The power’s not so reliable over there.” He then points out that
his one concern is there are many competitors in the field, and since
power-surge protectors don’t need to be replaced that often, this huge
demand he predicts must materialize for earnings to grow.
“Manpower is an additional stock we got into through the back
door,” Papp continues, scratching his balding head. “We liked it because
its biggest market is in France. The French have such stupid
regulations. If you fire or lay off a worker over there, you’ve got to
pay them for two years. The same is true in Sweden and all of Germany.
You can’t just lay anybody off. The net result is companies
won’t hire any permanent workers. They want temporary help. Who
benefits from that? Manpower. Sure, we could go buy shares in a
foreign outplacement agency. But buying Manpower, a U.S. company,
is much safer.”
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