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As Buffett Places Bets Abroad, Your Profits May Still Be in the U.S. Editor’s Note: Today, we have another recession proof way to score big money, while even Buffett is fleeing this country. Wayne even includes a few smaller companies that should do handsomely over the next few months. Enjoy… Buffett’s Recession and Our Discount Retailer’s Profits
Reason being, Buffett’s looking to start buying up “family owned, privately held” businesses on the cheap overseas. It’s difficult for him to find “Buffett-sized” deals in the U.S. anymore, so it only makes sense that he’d look for greener pastures elsewhere. However, Buffett also gave another reason for why he might want to start placing his bets in other parts of the world… My friends and I have been debating the “recession” topic for a while now: Are we currently in one? Will we run into one this year or next? What will the effects be? But when I read that Buffett thinks the U.S. is already in a recession and it will be “longer” and “deeper” than any we’ve seen for quite some time, I definitely began to think less about “what if we go into a recession” and more along the lines of “What should I do with my money now?” ******************************** Savvy Investors In 2007’s Best-Performing Bulletin Board Stock Made Over 4,000 TIMES Their Money In Six Months Yes, you read that right: Those holding shares in the “Best of the Boards” rode gains of more than 4,000 times their investment (409,900%) between New Year's Day and the Fourth of July last year. Had you been one of them, your $1,000 investment would've morphed into $4,099,000... Get on board to find which one’s going to be 2008’s best performer… Read on here… ******************************** There are dozens of questions (and even more answers) on TickerHound about which sectors hold up the best during a bear market, but a recent question is what inspired me to write today’s article: “Will certain retailers do well during a recession?” Traditionally, retailers don’t do well at all during a downturn — consumers start to curtail their discretionary spending as times get tougher, and items like clothes, cars and all the other little “extras” aren’t ranked very high on the “purchasing priority list.” However, if you really think about it, there are some retailers that “should” do rather well during a protracted downturn. The fact of the matter is, people aren’t going to completely stop buying the little extras, they’ll just be more selective about where they buy them. While I’ve come a long way since my childhood, I still remember what it was like when times were tough around my house. We were a blue collar household, three kids, my parents were always hustling at the end of each month to make ends meet — so when one of us needed new clothes, school supplies, etc, we’d take a trip to the closest discount store and bargain hunt. Without doing a survey of every household in the U.S., I’d bet that when times are tough and a recession is imminent, most of America behaves the same way. In fact, if you take a look at a 10-year chart for some of the discount retailers, you’ll immediately see that their stocks do better when the market is doing worse! So here are a few discount retailers that I think are worth digging into if you’re looking for some “Retailers for a Recession”:
As you can see from this list, these stocks show a wide range of market caps and P/E ratios. But the one thing they do have in common is that all of their stocks have taken a beating since the 2001–2003 bear market ended. ******************************** I Urge You to Not Be Fooled In the old Soviet Union, the comrades used to say, “Nothing is ever more certain than when it has been officially denied.” But you can only fool some of the people for so long. Mall traffic is down. Last year’s holiday sales were flat. Car sales are still off. Ford and GM, once the most important companies in the world, are actually flirting with bankruptcy. Even Chrysler just laid off 23,000. Meanwhile, foreign investors are running from the U.S. dollar. How “fine” does that sound to you? Grab your solution here… ******************************** However, during the bear market these stocks were hitting new highs while the rest of the market was going down the toilet…is there a theme here? You betcha! Now, this isn’t to say you should run out and start buying discount retailers tomorrow — some of these companies are still working out some operational issues, overexpansion problems, etc. But for the most part, if you’re going to take a position in retail as we head into Buffett’s “long and deep” recession then these are the companies you want to be looking at! Click here to suggest some of the retailers you think will do well during a recession. Regards, P.S.: My friends over at Agora Financial tell me that they are about to release something that can truly profit in a HUGE way when the economy does fall deep into this recession. Keep your eyes peeled this weekend… Editor’s Note: As always, send any questions or concerns to us at jim@pennysleuth.com. |
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