Just One Man's Opinion - 07 July 2005
by JMac
First, a correction concerning my recommedation last week on ExxonMobil: I mistakenly said Exxon had "20 million bbls in proven reserves" actually they have over 20 BILLION bbls in proven reserve. Sorry! only off by a factor of 1000.
For the first time in a longtime, I am reading little snippets from financial writers using the "R" word. A few of them think corporate profits for this, and the next quarter, "may" disappoint and think the steady climb in oil prices "may" lead us into recession in "06.
Personally, I have no idea when the next downturn will occur. I only know that it will occur....sometime. The business cycle is a natural event and is sometimes triggered by external as well as non-economic events, e.g. terrorism, war, etc.
In the period of "malaise" (78-80) we had the Iranian hostage crisis, skyrocketing oil prices and a Fed that raised interest rates at every meeting, sound familiar?
IF you think a recession is just around the corner and the market may pull back, what do you do,if you are a fundamental investor?
The usual safe plays are: Campbell Soup, Sara Lee, Krogers, General Mills, Kelloggs, P & G, Clorox and the like. Consumers will cut back on some things like going to the movies, Disneyland, gambling and buying a new home, but they got to eat and bathe.
However, why play the breakeven game? For a true investor (not a trader) a pull back is Nirvana. Would you put off buying from your favorite store because it was offering everything at a 5 or 10% discount? Further, remember in 1982? Thanks partially to the Reagan tax cuts, the market began the greatest bull run in its history. Generally recessions last only12-15 months.
Here is your chance to pick up that stock, which you have screened for the fundamentals, as I have defined them, but which you have been unwilling to buy because everytime you look at it it is at, or near its one year high.
For instance, I really like e-Bay. I think they are aggresive yet disciplined and they are a great China play. However, I am not ready to buy it at these prices.
When, not if, the recession hits, you should already know the stock, or stocks YOU always wanted to own, but couldn't afford and then move QUICKLY !!!!
First, a correction concerning my recommedation last week on ExxonMobil: I mistakenly said Exxon had "20 million bbls in proven reserves" actually they have over 20 BILLION bbls in proven reserve. Sorry! only off by a factor of 1000.
For the first time in a longtime, I am reading little snippets from financial writers using the "R" word. A few of them think corporate profits for this, and the next quarter, "may" disappoint and think the steady climb in oil prices "may" lead us into recession in "06.
Personally, I have no idea when the next downturn will occur. I only know that it will occur....sometime. The business cycle is a natural event and is sometimes triggered by external as well as non-economic events, e.g. terrorism, war, etc.
In the period of "malaise" (78-80) we had the Iranian hostage crisis, skyrocketing oil prices and a Fed that raised interest rates at every meeting, sound familiar?
IF you think a recession is just around the corner and the market may pull back, what do you do,if you are a fundamental investor?
The usual safe plays are: Campbell Soup, Sara Lee, Krogers, General Mills, Kelloggs, P & G, Clorox and the like. Consumers will cut back on some things like going to the movies, Disneyland, gambling and buying a new home, but they got to eat and bathe.
However, why play the breakeven game? For a true investor (not a trader) a pull back is Nirvana. Would you put off buying from your favorite store because it was offering everything at a 5 or 10% discount? Further, remember in 1982? Thanks partially to the Reagan tax cuts, the market began the greatest bull run in its history. Generally recessions last only12-15 months.
Here is your chance to pick up that stock, which you have screened for the fundamentals, as I have defined them, but which you have been unwilling to buy because everytime you look at it it is at, or near its one year high.
For instance, I really like e-Bay. I think they are aggresive yet disciplined and they are a great China play. However, I am not ready to buy it at these prices.
When, not if, the recession hits, you should already know the stock, or stocks YOU always wanted to own, but couldn't afford and then move QUICKLY !!!!
posted by TandaPundit at 12.7.05
0 Comments:
Post a Comment
<< Home