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Drumroll....

Crash! Here’s the Buy List for 2006:

AFLAC (AFL)

Bed Bath & Beyond (BBBY)

Biomet (BMET)

Brown & Brown (BRO)

Donaldson (DCI)

Dell (DELL)

Danaher (DHR)

Expeditors International (EXPD)

FactSet Research Systems (FDS)

Fair Isaac (FIC)

Fiserv (FISV)

Golden West Financial (GDW)

Harley-Davidson (HDI)

Home Depot (HD)

Medtronic (MDT)

Respironics (RESP)

SEI Investments (SEIC)

Sysco (SYY)

UnitedHealth Group (UNH)

Varian Medical Systems (VAR)

Well, no big surprises. You should notice lots of familiar faces. Fourteen stocks are holdovers from the current list. For this year, I decided to cut back the list to 20 stocks. Sadly, eleven stocks didn’t make the cut including favorites like Frontier Airlines, Progressive and Quality Systems. Yes, I know. It's sad to see them go (...sniff). I’ve also decided to cut back on all those orthopedic stocks. That was just too heavy a sector bet. I'm keeping Biomet though.

The six new stocks are Bed, Bath & Beyond, Harley-Davidson, Home Depot, Sysco, FactSet Research Systems and UnitedHealth Group. Please, make them feel at home. I think you'll get to like them.

I didn’t plan it this way, but I’m surprised at how many mega-cap stocks made the list. The new Buy List represents over $460 billion in market value, which is equal to about 4% of the entire S&P 500. The real biggies are Home Depot, UnitedHealth, Dell and Medtronic. Combined, those four represent about two-thirds of the market value of the Buy List.

I’m also surprised at the small number of financial stocks, although I’m going to keep stocks like Golden West, AFLAC and Brown & Brown. Any way you slice it, this is a pretty conservative list.

If you're not familar with the Buy List, here's the deal. I’m not going to make any changes to the Buy List for the next 12 months. This list is set in stone (I'll make adjustments if any positions are bought out). I’m going to start tracking these 20 stocks on January 3, 2006, which is the first trading day of the new year. For track record purposes, I’m going to assume that all 20 stocks are equally weighted based on the closing price of December 30, 2005.

As usual, you can assume that I own any of the stocks on the Buy List. Your pain or gain is also mine. I’m still going to track the 2005 Buy List through the end of next week.

I'm looking forward to a fun and profitable 2006!

Posted by edelfenbein at December 21, 2005 2:03 AM