It Makes Money

There’s a company I really like that’s part of the eye care investment theme that I really believe in. This is a large-cap company, so it doesn’t move as fast as a smaller enterprise. Still, it makes all kinds of money and I think it makes for an attractive, long-term opportunity.

The company is called Luxottica (NYSE/LUX) and it’s a well established Italian company that manufactures eye glasses and distributes them around the world.

I’m not sure why I’m so fond of the eye care business, but I believe in its demographics and people’s need to see correctly.

Luxottica is one of the best in the business and it has a long-term track record of success both operationally and on the stock market.

I always like to see a stock portfolio hold a basket of different type of holdings. Not only does this include diversification among industry groups, but also among small- and large-cap companies. When you find a solid, large-cap company with a track record of growth, it often pays to include such a company in a portfolio to help smooth out the volatility inherent in small- and micro-cap companies.

In fact, why shouldn’t an equity portfolio hold a couple of large- cap holdings, a couple of mid-cap companies, and a handful of speculative small-cap investments? This is the ideal equity portfolio in my mind.

And don’t forget that all stocks are speculative, even large-cap companies such as Luxottica, General Electric, and IBM. In the stock market, absolutely anything can happen to a stock. If Procter & Gamble can lose half of its value on the stock market in a short period of time, clearly, you have to consider all stocks as speculative investment vehicles.

So, when you’re thinking about the makeup of your portfolio, why not consider some larger-cap names along with all the speculative stuff. A steady grower on the stock market isn’t particularly exciting, but if it makes money, who cares?