2008 a rough year ahead
Here are the top ten themes that if played properly should help you thrive when everyone else is trying to survive.
Good luck in 2008!
- Conservation stocks: Companies that help others use less, save more, increase production with less. Energy will be the driving force to conserve. Why you ask? It takes too long to build new capacity and the need will be more immediate.
- Alternative energy: Specifically non-oil based transportation fuel manufacturers and energy production facilities.
- Technology - Communications: Work at home, telecommuting means huge savings of energy. Look for anything internet video related, from content creation to delivery. Lastly, security and identification will be emerging as energy savings opportunities for communities.
- Food: Food inflation is already a big issue but it will actually start changing behavior in 2008. Look for home gardening, canning and other companies that assist the individual grow their own food. From industrial agriculture to the home garden, everything works in this sector.
- Financials: Probably not in January, but this spring during earnings warning season you will be able to identify which companies will survive to 2009. XLF will be how I play the move when it is time. Financial companies are complex to analyze, but if you have the skill and time, really big profits can be made here.
- Emerging Markets: Think of the world like a gold fish bowl and there are two fish, a big fat one and a starving little one and everything that is produced is consumed. Well the big fat one just gorged itself and cannot eat for awhile. Everytime this happens the little gold fish consumes everything produced and gets incrementally bigger and stronger so the next time, when the big fat gold fish wants to eat everything, the little one can stand up for itself. If the US goes into a recession, it will be mild but the emerging markets are going to continue to grow. Emerging markets time for growth is when our consumption slows down.
- Recreation Stocks: Sell - Sell Short! Americans will not have the time nor the energy to consume for recreation. Motor homes, boats, ski vacations.
- Buy dollars and sell US Treasuries in May 2008.
- Municipal and State governments are going to have a really bad year. Sales and property tax dependent governments will have revenue challenges. All governments will see exploding costs of providing "services", namely from heating, cooling and transportation. Budgets are going to be under extreme pressure and raising taxes will not be an option.
- Lastly, my Presidential pick: Huckabee (R) versus Richardson (D). It would be the first time I was not choosing the lesser of evils. Everyone I mention this too laughs: First it would never happen and two, what great choices.
Good luck in 2008!
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