Hard Times Stock Picking: Bandages, Beans, and Bullets
Are we at the bottom of the current economic collapse yet? No one really knows, despite what the so-called experts might have to say. This could be a deep recesion, a depression, or a fundamental change in the global economic structure. Even in the midst of economic distress, there are always a few businesses that prosper.
What should an investor look for during grim economic times as a way to potentially make significant profits in the stock market?The military had a wise and concise list of what to get in order before a fight: Bullets, Beans and Bandages.
Although we all hope that our current economic problems have nothing to do with military planning, major civil unrest, or war, the three B’s are still a useful guide to how you might make money in carefully selected stocks.
First, let’s consider Bandages. A bad economic situation could turn disastrous in the face of a serious disease outbreak if we are not prepared. One potentially deadly threat looming on the horizon is avian influenza. Fortunately, researchers are hard at work on vaccines to prevent this rare disease from becoming widespread in people. One company to pay attention to is iBioPharma, Inc (OTCBB: IBPM), which owns commercial rights to technology developed by the Fraunhofer USA Center for Molecular Biotechnology in Newark, Delaware. This company has technology for vaccines against bird flu and other diseases. The interesting thing about their approach is that they use tobacco plants to produce the vaccines at a lower cost than other methods. In tough economic times, keeping costs low matters, and sometimes innovative approaches lead to lower costs.
Let us turn our attention now to the Beans part of the equation. Mainline branded products are not selling well these days, and stock prices show it. Have you taken a look at Procter & Gamble (NYSE: PG) or Kraft Foods (NYSE: KFT) lately? These are not speculative stocks, but their prices have fallen. By contrast, take a look at Family Dollar Stores, Inc. (NYSE: FDO). Over the past year, this company’s stock has gone up in value. It sells consumables such as paper products, clothing and home products to people who can’t afford to shop in the fancy, high-priced stores. The number of people in that situation is growing these days.
And, finally, we should look at the Bullets part of the list. Take a look at Smith & Wesson Holding (NASDAQ: SWHC) or Sturm Ruger and Co. (NYSE: RGR). Sales are rising and so are their stock prices. If times get tougher, the natural instinct that people have to protect themselves and their families may continue to create business and stock price success for these companies.
Disclaimer: This article is for information purposes only and is not intended to be interpreted as a recommendation to buy or sell any particular stocks or other investments. The author of this article does not own any position in the stocks mentioned here.
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