Contrarian Profits'  Instablog

While the dumb money is chasing the rally in stocks; the smart money is keeping a close eye on the economy. Bill Bonner has been hammering home this point in the Daily Reckoning. We’ve been doing the same here at Notes. (Consider it a friendly warning.)

A way to play the global economy decline is by shorting the airline industry. Here we turn to underground investor Martin Denholm, writing in today’s Smart Profits Report. The problem with the airline industry is that in business terms, it can be “lose-lose,” no matter what the economy is doing…

The big daddy of underground investors, Jim Rogers, says the best way to play this downturn is to focus on commodities and agriculture ETFs (hat tip The Daily Crux). The primary logic behind this play is simple to understand.

Typically, a stock buyback signals corporate executives are bullish. But at Wal-Mart (NYSE:WMT), there is a good chance it is simply another savvy marketing move. This time shareholders are the ones dealing with everyday low prices.

The U.S. economy shed “only” 345,000 jobs in May, the Labor Department said this morning. We forecast Wednesday that today’s employment gauge would beat expectations, but wow… this number smashed the Street’s guess of 520,000. Last month’s loss is the smallest since it all hit the fan last September.

Most of us aren’t compulsive gamblers, heavy drinkers, or chain smokers. Three habits that over time, are bad for your wallet and - more importantly - your health. But from an investment standpoint, the so-called “sin stocks” - companies that make alcohol, firearms, cigarettes and those that operate gambling casinos - are doing quite well.