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Tuesday, 27 July 2021

What is a Darling Stock? Three Darling Stocks to consider buying

What I call a "Darling Stock" is essentially one that has a nice upward curve, measured over a 5 year or 10 year period.

Shown here I have picked out 3 stocks which I consider to be "Darling Stocks".

  1. Kirkland Lake Gold Ltd (KL)
  2. Park Lawn Corp (PLC)
  3. WELL Health Technologies Corp (WELL)

Each of these stocks exhibit the things that I am looking for in a stock that I find desirable. That nice upward curve in value.

I can forgive the occasional dip in value (eg. due to COVID pandemic) if the stock recovered quickly from the dip and is still on the upwards trend.

Let's start with Kirkland Lake Gold...

It is a gold mining operation, obviously, but what I like about gold mining is that it is pretty immune to recessions. Whenever there is a recession many people put their money into gold, which causes the price of gold to skyrocket. Thus even if there is a recession gold mining operations tend to be making a lot of money.

Nor is this the only gold mining company I have invested in. I have invested in other gold companies, as well as companies that deal in silver, copper, and the mining of precious minerals usually used for batteries.

I expect battery usage to increase dramatically during the next 25 years so a company like NEO Battery Materials Ltd (NBM) is also a sure bet in my opinion. Go look at the curvature on NBM stock and tell me you don't think it is worth putting at least some $$$ into.

One of the other factors I consider when buying stocks is the issue of potential. A company which mines materials for batteries is increasingly in high demand.

Likewise gold, which is traditionally thought of as being used for jewelry, is also used for making computer chips... And the world is rapidly expanding the number of computer chips it needs, but we only have a finite amount of gold available.

I also have a hunch that at some point we will start using silver (or electrum, which historically is a mix of silver and gold) for making computer chips because the price of gold will be so high that computer chips manufacturers will start considering using silver or electrum to solve their problems instead of pure gold.

Thus a gold mining company like Kirkland Lake Gold with a strong record of increasing in value is a solid investment in my opinion.

Park Lawn Corp is a company that deals with funerals and human remains. Every time someone dies, they need to buy a plot of land in a cemetery and they need to buy a casket. This is essentially a real estate company for the dead.

Babyboomers are currently in their 60s and 70s... And a lot of them are currently thinking about dying and buying up cemetery plots. Some of them will have their cemetery plots purchased after they died, or will delay until they know they are sick and dying.

While there is a blip in the value of PLC stock at the start of the pandemic, it becomes pretty clear that they recovered quickly and their profits continue to be solid as Babyboomers (and people in general) continue to die.

What I am banking on with PLC is the idea that lots of Babyboomers (and people in general) will be dying during the next 25 years, and every time someone buys a casket, arranges a funeral, buys a cemetery plot via PLC then the company is making money.

Now the value of their stock isn't rising as quickly as Kirkland Lake Gold (or the next example below), but it is still delivering with a solid increase in price over time.

I fully expect PLC to continue to rise in value, with stocks being worth at least $75 per share by 2030, and possibly as much as $150 per share by 2040.

Do I feel bad about making money off of people dying? Nope. Because someday it will be my turn to die and I want to enjoy my retirement knowing that I made smart investments when I was younger. What I am really making money off of is the cycle of life and death that happens to us all.

Speaking of life... Let's talk about healthcare.

Or in this case the electronic records of healthcare. Everything is being digitized these days and in recent years there has been a huge upsurge in governments and private clinics outsourcing their digital records to companies like WELL Health Technologies Corp (WELL).

This is another example of how I foresee the future going.

All medical records, dental records, eye exams, etc... They will all be digitized and various select companies will be in charge of those digital records and the cybersecurity surrounding them, as people will definitely want their records kept private.

What you will also note with WELL is that there was only a tiny blip during the pandemic and then the stock soared in value - likely because they were needed to track medical records of people who had COVID tests and also COVID vaccination records.

Even before the pandemic WELL had that nice upward curve, and thus made it a smart buy, but during the pandemic you will notice the price of the stock shot up like crazy.

When the pandemic is eventually over (assuming it ever ends...) my suspicion is that those medical records are going to be needed continuously as governments and people realize that they are now reliant upon the digitization of medical records. There is no going back to paper.

Plus digital records are greener than using paper records, so there's that benefit too.

In my opinion WELL will continue to grow in value. By 2030 I believe it will be worth $50+ per share and will be a massive corporation. Buying it for $7 per share will feel like peanuts compared to what it will be worth just 9 years from now, or 19 years from now.

Let's pretend you have $3000 to invest.

If I were you I would take $1000 and put it into all 3 of these stocks... Then just sit and wait. Don't sell for at least 9 years.

By 2030 I suspect that $3000 investment will be worth $12,000. At least that.

You could leave your money in a bank savings account and let it accumulate interest, but that interest would be peanuts when you look at the interest rates banks are paying you. Complete peanuts. Food prices are going up due to inflation faster than bank interest rates.

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