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February 12, 2008
“Danger Lies in Wait”
A recession has become the market’s boogeyman. No one’s entirely sure they’ve ever seen him up close but they sure have FELT his presence from time to time. Even when he’s really not there.
Take for instance today’s market. According to a recent Associated Press-Ipsos poll, Sixty-one percent of the public believes the economy is now suffering through its first recession since 2001.
61%! Wow. The majority of us are definitely letting the boogeyman creep his way into our psyche. But the facts—yes, there is more than one—are clearly showing we are not in a recessionary period. Even the Chairman of the White House Council of Economic Advisers, Edward P. Lazear agrees with me, “I don’t think we are in a recession right now, and we are not forecasting a recession.”
So, yes, the market is slow going and housing probably hasn’t hit rock bottom quite yet but that certainly doesn’t mean that it’s time to wave the white flag in defeat!
Opportunity in Adversity
In fact, another sign that you shouldn’t retreat—the market is reacting positively to bad news, a sign of being at or near a market bottom. The positive market reaction to Motorola trying to sell off its cell phone division is just one example of this.
Corporate leaders are doing major merger and acquisition deals after taking a break caused by fears of Sub-Prime and its potential effects. The biggest recent M&A bid, Microsoft chasing Yahoo, involves a 62% premium on share price at the time of the offer. Microsoft expects profits to continue to be healthy.
CEO’s are not hoarding cash for emergencies—typical when entering a recession—instead they are expending large amounts of excess cash on major share buybacks, especially in tech, but also in other sectors of the market.
Insider buying is at record levels, which is another not-to-be-missed indicator that corporate leaders, at least, think their share prices will increase. Share prices, of course, don’t normally increase during a recession.
Quite simply, objective indicators show we are NOT heading into a recession.
The rampant volatility of the stock markets in 2007 and (thus far in) 2008 has left many investors stunned and unsure of what action to take next. You can protect your portfolio and find pockets of opportunity in adversity — you just have to know where to look.
That’s where I come in! I will show you where I look and tell you exactly what you should do to succeed. I just put twenty-five stocks—25—on the Trending123 Watch List. A few of them have already moved to the Buy List. This is how fast the market is moving & and how quickly you need to react! Join me now to get the complete list of the 25 stocks you should be watching—and playing when the time is right!
Sincerely,
John Lansing
Trending123
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