Stock Picks for the Greater Depression
People ask me all the time, "Charlie,
do good investments exist in this time of economic collapse?"
The most honest answer might be, "Guns and ammo," but that's not usually what they want to hear. There are actually a few decent equities out there -- and equities are the only investment vehicle that makes any sense whatsoever right now since real assets (equipment, real estate, patents, logistical systems) underlie them. When you buy stock, you're buying a stake in the company. If the company survives -- it doesn't even have to thrive in this environment -- it it outlasts the bad times, you'll do OK. That's the basic premise.
As I have been so incredibly prescient in my financial and economic predictions, it would be ethically repugnant for me to withhold advice on the long-term opportunities that will soon be available in our glorious free markets. Bear in mind that I am not a certified expert of any kind, just a dude who is more often than not (by no means always) right. If you take this advice and lose money, it's on you; do your own research. The following is just one opinion.
First of all, I would not buy jack doodie in terms of stocks until the Dow is down in the 7,000s, possibly even the 6,000s. This market has some room to fall, an unfortunate situation for many that will end up being highly profitable for those of you who took my advice a year ago and got into short positions or cash.
Second, it's important to define our time horizon. If you're looking to make a quick buck in the market, good luck to you. You'll need it. My picks are companies that will survive and still be around 20 years from now. That's right: 20 years. If you're not that patient, stop reading now. Go listen to Jim Cramer or read Fortune or something.
Here are but a few
companies that might weather the financial and economic collapse
- General Electric (NYSE: GE) -- My leftish friends will undoubtedly want to castrate me for recommending this company because it is a huge arms dealer, but GE is also very well diversified, with large tentacles in renewable energy, news, and the entertainment industry, three sectors that will do well even in the next five years. GE pays a decent dividend. The yield is around 6 percent right now. Most importantly, GE will still be around in 20 years. Buy and hold. Take the dividend. In 20 years, you'll be glad you did.
- Google (NASD: GOOG) -- Don't buy it just yet. GOOG could drop precipitously in the short term as people cash out the profits they've made over the past five years. However, at some point (you decide) it will be a good buy. The Internet is not going away, and more and more commerce will be done on the Web. People will need to navigate the ocean of information, and Google's core business focuses on that highly complex, difficult-to-deliver service. 20 years from now, people will still be Googling.
- Bombardier (TSE: BBD.B) -- This one looks absolutely delicious. It has taken a beating, but in the long term is very well positioned, not because of its aero business but because of its expertise in building rail passenger cars. When the government starts doing more about this crisis than printing money for the sake of printing money, large investments will be made in passenger rail, and BBD will be there. Additionally, established operations in India and other parts of the world where prosperity grows bodes well for this company's future.
I could go on, but you're not paying me enough. Anyway, look for companies with decent cash positions, forward-looking leadership, real assets, and footholds into industries of the future, namely: renewable energy and infrastructure development. There are a surprising number of such companies out there.
In the short term, invest in seeds, water treatment, and hand tools. Success in the stock market right now is a matter of picking the "last men standing," and even they will be pretty beaten up. We are facing a total financial and economic meltdown, after all, and it won't be pretty.
Good luck! (You'll probably need it.)
Ain't "capitalism" grand?