Every recovery is different.
What was doesn't come back as it did before. Investors waste years waiting while, beneath the surface, something new and different begins to take shape.
So financial engineering is done. Housing is done. Just as the Internet, as an economic driver, was done by 2001. This doesn't mean the old sectors disappear. It's just not where you want to be looking.
In the present recovery - and we are in a recovery - the new game will be manufacturing, making things. Most investors consider manufacturing an afterthought, even a joke, in our 21st century economy.
Opportunity is found in these kinds of earnings surprises. You get in before they happen and you win. You get in afterward and you can still win, just not as much.
There are sound reasons for believing in American manufacturing:
- Capital is practically free.
- Energy prices are lower here than elsewhere, driven by the natural gas glut.
- Our infrastructure could use work, but it's not terrible.
- Wages are under control, and American workers are still among the best-trained, most productive in the world.
This may sound political, because much of the Administration's case for re-election is based on these facts. Bin Laden is dead, GM is alive. But don't let your politics blind you to comparative advantage. What's boiling under the surface is growth, real growth, and you can make a ton of money from it.
Disclosure: I am long AAPL.