Jim Regan

4 Stocks for an Anticipated Industrial Recovery

I absolutely love the transports, but remember that this post is for a global recovery. If the USD weakens, these companies won't be invited to the party because most of them draw nearly 100% of their revenues from the United States.

I will write up a followup here, since I am actively watching the railroad industry... which I believe is fundamentally the strongest. However, I would wholeheartedly disagree with CSX, because they carry poor performing products in the East... look at UNP, which is in all of the right places at the right time. Thanks for your comment! That's a fantastic point to make.


On Mar 29 06:51 PM Minlita wrote:

> For anticipated recovery I chose transport stocks
> If manufacturers' profits were rising they would produce more and
> need to ship more goods to consumers.
> So health transports that ship goods to consumers are correlate to
> the health industrials.
> But the two averages should move with each other; if they diverge,
> this may be an early warning of a shift in the primary trend. <br/>So
> to the author list i like to add UPS, CSX, YRCW OSG

4 Stocks for an Anticipated Industrial Recovery

That's entirely fair, I was looking at it with a short time horizon because it is simply much easier to observe when we look over the past year or two. At any rate, investors are currently over-diversified into American stocks... and it may be approaching the time to move back into some international exposure if the dollar were to weaken. After all... that is literally the ONLY reason that some of these industrial companies are missing earnings. It is rather remarkable that these names aren't getting their fair share when it comes to equity price movements.


On Mar 29 10:24 AM prudentinvestor wrote:

> A reasonable article and selection of stocks for the longer term.
> Your recommendation of buying CAT in the low 20's sounds good if
> it gets there again, perhaps in the wake of bad earnings or a dividend
> cut, as it is now around 30.
>
> Your statement "..... As we can see, the Euro has virtually collapsed
> against the U.S. Dollar......" strikes me as odd, perhaps the product
> of a youthfully short time persepctive. When the Euro was created,
> it was designed to be equivalent to one dollar, and indeed there
> was a substantial period when a dollar bought you more than one Euro
> (briefly as much as 1.25 Euros). The Euro cannot be said to "have
> collapsed against the dollar" unless its value became substantially
> less than one dollar. What you really mean to say is " the dollar
> collapse against the Euro has been lessened".

4 Stocks for an Anticipated Industrial Recovery

That's entirely fair, I was looking at it with a short time horizon because it is simply much easier to observe when we look over the past year or two. At any rate, investors are currently over-diversified into American stocks... and it may be approaching the time to move back into some international exposure if the dollar were to weaken.