Ruger Security
Hard Times Stock Investing
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. We may in only a deep recession, but perhaps a depression or even a fundamental shift in the structure of the global economy. 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? It might be worth considering that old military advice about what to consider before going into 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 threat on the horizon that medical experts agree is serious is avian influenza. Researchers are working on vaccines in the event this thus far rare disease becomes widespread in humans. 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. A fascinating thing about their approach is that they use tobacco plants to produce the vaccines more cheaply than traditional 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? They are not speculative, high-risk stocks, and yet their prices have tumbled. By contrast, take a look at Family Dollar Stores, Inc. (NYSE: FDO). This company’s stock has actually risen over the past year. 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.
Finally, let’s consider the Bullets part. 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. In uncertain times, it is natural for people to want to protect their families and property, so increased personal security spending could be good for these companies.
Note: This article is intended for educational purposes only and should not be interpreted as a recommendation to buy or sell any particular stocks or other investments. The writer of this article does not currently own any stock in any of the companies mentioned in the article.
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