Dream Team Stocks

There is a big misconception that the stock market is cheap.  Sure, it’s cheaper than it was on a valuation basis now compared to a few months ago and certainly compared to 1999.  But, if we don’t know where earnings are going to bottom, how can we value stocks accordingly.  In addition, valuations haven’t mattered when there is this much fear.  As long as there is no demand for stocks and a ton of fear, valuations won’t matter.

But, we all know that over the long-run, it’s all about profits (earnings).  And, right now, there are definitely cheap stocks out there & sectors.  This is the time to build that shopping list of “dream team stocks”.  This is your chance over the next few months to buy some of the best companies in the world at very very cheap prices.  Just don’t make the mistake of assuming that’s the entire market.  They’re not all cheap.  But, there are businesses where demand is growing, debt is manageable, and the stock is too cheap because of fear.

We know there is and will continue to be demand for medical products & services regardless of what kind of economy we’re in.  That means selective healthcare companies that are on the cheap can slowly be bought.  How about global infrastructure?  Is that going to stop?  No.  It’s slowing down, but global growth will resume and the companies that do most of their business abroad will benefit from that.  Demand for their services and products.  That’s what we’re looking for.  How about companies in the fertilizer and agribusiness space.  Extremely cheap right now.  These are just a few areas I’m watching carefully.

Over the next few weeks, I’ll be examining some of those “dream team stocks” that we’ve always wanted but are just now getting the opportunity to buy at reasonable prices.  Call in to my radio show from 7-8 a.m. CST weekdays at 1-877-777-7713 toll free to let me know what stocks are on your list.

Remember, this will be a gradual process of accumulation.  This is not something to do overnight.  This will be a multi-month process.  Also, if conditions remain the same and you do accumulate a stock or two, keep your hedge on by shorting the overall market with an exchange traded fund until the demand for the overall stock market picks up and the desire to sell exhausts.


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November 2008
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