American Elitism

Sometimes good ol American arrogance affects us all. Isn’t it odd that most Americans can only name 2-4 stock exchanges? Now we seem to think that our mortgage crisis, which will lead to an eventual recession, will affect the rest of the world’s markets. While CDO (collateralized debt obligations) defaults are at a high point, there are so many sectors to our economy that remain unaffected. Example: when Ford (F) was downgraded by S&P from AA to below “investment grade” , did the US car market plunge? Did prices drop? The “Market” is kind of like the Earth; no matter what we throw at it, the greater good always seems to win out. After an ice age, come the Grand Canyon and Great Lakes. CDO, CDO2, and other mortgage backed securities. That said, in the spirit if “buy low, sell high,” if you have some extra money look at things like Freddie Mac, Fannie Mae, and Wells Fargo. These are all companies that will see short-term dips, but each has what we at Landes refer to as FSP or financial staying power. Basically, over the long haul, these companies will bounce back into the black and see continued growth.
For the more immediate returns you will need to look places like: Tech, Pharma, and Blue Chips. There are some good values in small caps, but you have to look. One other place to look is at short term luxury goods and services, like restaurants. This short-week will see a lot of moving and shaking. I expect to see a lot of volatility, but all-in-all we will be up for the week. My suggestions are: NVIDIA (NVDA), Ultra Petroleum (UPL), and BP.I hate to say this but perennial disasters lead (one month later) to oil spikes. Oh yeah, BP will be pumping in Oman by 2011.