Larry Bellehumeur

Are These Seven Defensive Blue-Chips Finally a Good Buy?

Dividends -- I can see your reluctance, as the two telecoms are likely riskier than the other stocks listed, due to their High CapEx requirements. However, there is a lot of room to grow, especially in the Wireless space with the upcoming LTE launches in 2-3 years, so as long as they can control their costs, these companies could not only maintain their Cash Cow abilities, but also could show some strong growth.

Long/Short -- You could be right. I did mention that Kraft was somewhat susceptible to this, as are companies such as Kimberley-Clark. Not sure if this is an issue with Coke at all (Coke's dominance is not likely to be downgraded to a local brand). With P/G, sure, there could be some drops when it comes to batteries and razors, but they have been through these downturns before, and carry a lot of clout with the retailers. A serious threat would be if Wal-Mart decided to play the Generic game to a greater extent!

thanks for both of your comments...
Larry

Are These Seven Defensive Blue-Chips Finally a Good Buy?

Hello everyone,

Ken - I don't mind having my spelling corrected. I hope that you were able to still enjoy the article, despite my incorrect spelling of PG.

138602 -- Thanks for your kind words. Indeed, Diageo would be one of the 5. I probably should have bought some on Friday, when it dipped below $52 (for the ADR). The reality is that Sin stocks, such as Diageo, all fair well during downtimes. Since their brands for the most part have strong leadership positions (most are in the Top 3 in their categories), I would suspect that they should weather the storm well and that most of the downside is priced into the stock. I also like Diageo for the long-term as a potential play on the Baby-Boom, as people upgrade their selection as their disposable income increases. As long as you have a decent time horizon (if you are looking at under 1-2 years, I can't help you much), I would buy this one. As I said, I should have bought last Friday!

Disclosure -- Bought VZ (last Friday, luckily before the spike), PG (at $55 today), and a 1/2 Position in KO (I think around $41.50).

Cheers and I appreciate your comments, even those about my spelling and possible grammatical errors!

Larry

Diageo Earnings Confirm the Long Case for Investors

Mark -- Thanks for stealing my thunder, I was just finishing up on an article praising Diageo! =)

Great long term buy, as it plays some very important trends (Emerging markets moving up the "drinking" scale, the move towards finer Spirits by Developed Nation's "Baby-boomers" and the spike in Guiness sales thanks to the rise in disposable income in Africa).

Cheers
Larry