Economic turmoil and geo-political turmoil go hand in hand, says Justice Litle. That’s why the threat of war is rising in many parts of the world. And that’s why defense stocks could be in for a good year. Justice says AeroVironment (NASDAQ:AVAV) – which develops hi-tech military equipment – should be on investor’s radar screen right now.
A small article in today’s China Daily reported a startling number that revealed the true depths of China recession – giving investors pause for any near-term recovery in the country’s blistering economic growth of years past.
India’s economy has not escaped the global downturn. But growth is still much higher than the developed world. Aggressive rate cuts and a fast-growing service sector will help revive the economy. Mike Caggeso picks two deeply undervalued Indian companies with a strong potential for profits.
The breakdown of international trade is key threat to the global economy in 2009, says Chris Mayer. Several countries have already taken action to protect domestic industries, including the US with its auto bailout. If this trend continues, Chris says the global downturn could become even deeper than imagined.
T. Boone Pickens thought oil was going to hit $150 last year and go up from there. I don’t mean to pick on him. He’s worth about $3 billion. He’s earned his stripes. I have nothing but respect for the man.
Pickens wasn’t the only person who got 2008 wrong. There were plenty of others.
When it comes down to it, anybody can make predictions. It’s not very hard. But it is hard to make ones that do what they purport to do: predict.
My advice is to take them with a grain of salt. If predicting the markets were so easy to do, most of Wall Street’s brightest fund managers wouldn’t have lost 40 percent or more last year.
I’ve made my share…
At the moment, money is being sucked out of the financial system, bringing the threat of deflation. But for James Howard Kunstler, the only question is when the new money being pumped in by the Fed will exceed the amount that has disappeared. James says we could see serious inflation – and a slump in the US dollar – before the end of 2009.
The US dollar surprised many by breaking out of its six-year downtrend in 2008. Currency expert Jack Crooks says the global economy will get a lot worse before it gets better. And the euro will come under severe pressure as individual members of the union crumble. Jack says this all poins to further greenback strength in 2009.
BHP Billiton Ltd. (NYSE:BHP) is getting stronger, says Horacio Marquez, even as commodity prices slump. With its low costs and diversified operations, the natural resources producer is well positioned to ride out the credit crisis. And when commodity prices rebound next year, Horacio says BHP will lead the recovery. He recommends buying shares at today’s distressed prices, and holding for big long-term profits.
To show how far emerging markets have fallen, and where they are headed for 2009, look no further than the theory of ‘decoupling’, says Irwin Greenstein, writing for Contrarian Profits.
US Treasuries are in a bubble, making them ripe for shorting. But that trade is too obvious, says Justice Litle. And the situation is more complex now that the Fed is getting involved. Bernanke & Co could support T-Bills in the medium term, but that will only increase the odds of an epic decline after.
