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Chris B » Comments » AZO

  • 2009 Depression Will Be Nothing Like 1929 [View article]
    "You certainly want to be long any stock that is doing well in this environment. Consumer staples stocks such as Autozone (AZO), Wal-Mart (WMT) and McDonald's (MCD) are prime examples "
    ----------------------...
    These safety stocks also won't go up as fast as more volatile, high beta, cyclical stocks in a recovery. In fact, they'll probably underperform the market and riskier stocks on the way up because high beta companies are more discounted right now. If you sell your more volatile stocks on the way down, and buy safety stocks with small gain potential on the way up, you have ensured underperformance against the market by locking in oversized losses and undersized gain potential. When the bottom hits, you'll want to be in high beta - but solid - companies. The good news is that there are plenty of them available. Examples: staffing agencies, technology, international stocks, entertainment & leisure, etc. Many of these shares will appreciate over 100% in the next 3 years vs. maybe 30% for pricier but safer shares like WMT (what, you think their P/E will rise to 25 or something?).

    If you think that's wildly optimistic, take another look at stock values after the bottom of the great depression. A lot of investors had fled to safety at the time, due to no better reason than emotion and a horrible external environment. They locked in their losses early and missed double-digit gains in the later half of the depression and WW2.

    The bottom is never a time to follow the herd into supposed safety. It's when stocks get irrationally cheap that you get rewarded for thinking for yourself and being agressive. Unfortunately, we investors tend to do the opposite.
    Mar 06 13:46 pm |Rating: +10 -5 |Link to Comment
  • 80 Winning Stocks That Have Nothing to Do with Gold [View article]
    During every recession, people declare that it is a short-term trading market.

    After every recession, people point to the bottom you should have bought at (and some claim to have done so!).


    On Feb 27 01:27 PM k9s-4-k8 wrote:

    > Perhaps, Trader Mark should seek a user name change. These aren't
    > trades, they are at best, buy and holds for the next bull market.
    > This is a short term trading market. Most profits are seen short
    > term unless one is on holding short positions which will remain in
    > favor with all choppiness till this bear has been shot and mounted.
    Feb 27 15:09 pm |Rating: +2 -2 |Link to Comment
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