Thoughts on the market: after a very strong rally off 2022's low in June - July, we think the market will be choppy in August and September to digest the positive sentiments, price in upcoming volatilities regarding inflation, international tensions and upcoming midterm elections. This means a possible re-test of the lows which would offer a good buying opportunity. We don't see the market making new lows in 2022, yet we are not very optimistic there can be much more gains from here.  

Individual stocks:

1. Apple (AAPL) — We currently don't own any Apple as we traded out of it prior to the quarter, which obviously turned out to be a big mistake. However, given the recent strong run, we want to be disciplined, be patient and wait for the stock to come in before starting a position.

2. AbbVie (ABBV) — We’re on recession watch, which means owning defensive drug stocks is strategically important. While one of AbbVie’s key drugs, Humira, goes off-patent next year, we think the company has plenty else going for it including a roughly 4% dividend. Abbvie is a buy right here.

3. Advanced Micro Devices (AMD) — AMD continues to prove that we have been correct in trusting CEO Lisa Su, who has recognized the slowdown in low-end consumer and quickly pivoting towards high-end enterprise. For those who missed the opportunity to buy in the $70, we recommend starting a small position here and wait for shares to come in before buying more.  

4. Costco Wholesale (COST) — Costco continues to show it is the best-run retailer in the world. We are actively trading around our core position, buying into weakness and selling into strength. We currently don't own any shares at this price, but are waiting to buy in the low $500.

5. Salesforce (CRM) — We remain confident in CEO Mark Benioff and the enterprise software firm’s long-term story. Company’s big Dreamforce conference is scheduled to take place next month after two years of Covid-related alterations. Historically it has been a valuable event for the company.

6. Cisco Systems (CSCO) — We’re actually worried persistent supply chain issues could cause the networking company to report weaker-than-expected earnings later this month. We're debating whether to cut some losses from this name prior to the quarter.

7. Coterra Energy (CTRA) — Our position in Coterra was started this year to help us hedge the portfolio against skyrocketing energy prices. We continue to like shares here because of its strong capital returns and sizable natural gas business. The focus is on the latter, as the world is heading into the winter season without enough natural gas for heating. 

8. Chevron (CVX) — Chevron is a blue-chip play on oil and energy. The company is extremely well-managed, disciplined and has very attractive capital return program. We like shares here.

9. Danaher (DHR) — The most recent quarter proved why we need to own this high quality life-science company into a recession. We would not be shocked to see shares march higher from here.

10. Walt Disney (DIS) — The market has agreed with our faith in Disney, but we’re not giving up and maintain our long-term view that the company’s iconic franchises and theme parks are very profitable. The stock has gained 20% from its 52-week low last month. But at around $108 per share, it would have to gain more than 70% to get back to its 52-week high.

11. Ford Motor (F) —  A slowing economy poses a risk to Ford, which is why shares were cut in half from the start of the year. However, the automaker reported an incredible quarter and included a boost to its dividend, demonstrating the business is running very well. Despite our love for the company and how good of a job CEO Jim Farley has been doing, we have to admit we don't see much upside for the stock from here, after the stock’s 30% move in July. We trimmed our position in the $16, and will wait for a pullback to add to our position.

12. Alphabet (GOOGL) — Investing on growth has been the focus at Google Cloud in order to catch up with Amazon Web Services and Microsoft’s Azure, explaining why the unit lost $858 million on $6.3 billion in revenue in the second quarter. We’re hoping that soon Google Cloud can become profitable, but we have no problem being patient to wait with shares at considerably lower valuation on an earning basis than Amazon or Microsoft.

13. Halliburton (HAL) — So far, it looks like we unfortunately initiated this position at the top. However, nothing has changed in our investment thesis for this company, meaning we're looking for every buying opportunities that we can to bring down the cost basis.

14. Johnson & Johnson (JNJ) — One, healthcare - drug manufacturer companies are the right type of stock to own into recession. Two, J&J has something else going for it: the planned separation into two companies. One will be focused on consumer products, the other with faster growing pharmaceutical and medical device divisions. 

15. Eli Lilly (LLY) — Lilly's strong performance in 2022, +10% versus a -10% S&P 500 signifies this is the right stock to own into a recession. We trade in and out of this name, selling into strength and buying into weakness. Following the company’s mixed second-quarter results, shares are coming in for us to start this position again. 

16. Meta Platforms (META) — Confidence in the Facebook and Instagram parent is waning, which is why we're considering cutting down on this name.

17. Morgan Stanley (MS) — We believe Morgan Stanley is the right financial stock to own, with a proven revenue diversification strategy which is more stable than the rest in the industry. MS shares carry a roughly 3.6% dividend yield and management is agressively buying back stock. 

18. Microsoft (MSFT) — We recently trimmed a little after a strong few weeks. The sale does not mean we’re any less bullish on the tech giant’s long-term prospects, particularly the secular growth trends behind its cloud business Azure. Rather, we’re just trying to maintain discipline in this tough investment environment.

19. Pioneer Natural Resources (PXD) — We think Pioneer had the finest quarter of our upstream energy names — and with its latest dividend increase, the stock carries an annualized yield between 15% and 16%. We think shares should be bought right here.

20. Wells Fargo (WFC) — The market hasn’t been kind to financials this year, as recession fears have outweighed the benefit higher interest rates can bring to banks like Wells Fargo. We’re not ignoring the growth of WFC’s net interest income, though, and believe its loan book is quality enough to withstand a downturn. However, if we don't have a recession, let's just say shares can go up to the moon.