Best investments for the coming year?
So... do y'all think that our current market downturn is a temporary blip, or are we heading for a major meltdown in 2008?
In your opinion, what are the best industry, stock, commodity, or mutual fund picks for the next 6-12 months.
IMHO, I believe that global resources, particularly oil, precious metals, and technology specific minerals are a good bet. I believe that one should avoid real estate based funds and lending institutions. Opinions?
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I own Berkshire-Hathaway B shares (ticker: BRK.B or BRK/B) and am a big fan of the company for many reasons (it's not just because it's performed well, but that helps). That said, there is some speculation that if either Warren or Charlie Munger die, this may significantly affect the stock price in an unpredictable manner. Right now, I believe that Warren's management succession plan is strong enough to weather a change in management, and B-H is fairly decentralized in how it's managed anyways.
Regardless of what you do, I think you'd be wise to skim through the most recent Letter to the Shareholders (annual report) from Warren Buffett (see the B-H website). There's been a lot of guessing going on as to why he has bought a lot of shares in railroad companies. Warren periodically does mysterious things that end up panning out (e.g., he invested heavily in currency last year--notice what the Euro is doing these days?). My theory on the railroads is that an increase in energy costs will, in turn, lead business to seek out cheaper means of transport. Logistics is not a trivial business cost--and anyone who ships anything will try to find an edge. Air transport may become quite expensive, pushing more business to railroads.
An idea I'd like to throw out there for 2008: the falling dollar may make exports out of the US more attractive. US companies haven't changed materially, but the cost of goods that we add significant amounts of value to (i.e., we're REALLY REALLY good at producing, making or marketing it) may start to have increased demand overseas. I think that anyone involved in this line of possible profit uptick (manufacturers, exporters, raw material suppliers) should be looked at. Big caveat: if the equity appears to be overvalued by conservative measures (P/E ratio, for example), I'd steer away from it.
I think it's fair to say that any commodity (oil, minerals, etc.) is a tricky proposition to invest in. I, for one, won't invest in it since I don't feel comfortable with complexities posed by geopolitical, industrial demand and other factors. I also agree with you that many things involving lending or real estate are tricky (although if you're going to take a long view--say, 10 years--I'd rethink this).
I've long been a big critic of most mutual funds (see Warren Buffett's comment about the Gottrocks and Helpers in previous shareholder letters) and can't recommend them. The closest I'll get to these is an ETF (Exchange Traded Fund) with very low expense ratios.
I don't know you personally, so I'll default to adding this warning: as I expect the markets to be especially squirrelly this year, the basic rules of investing noted by the Investor's Business Daily are especially important. I recall one of those rules notes that if an equity you hold falls by a certain percentage (10%?), it's time to dump it ASAP to cover your bases. I've seen friends throw good money after bad--with frequently bad results. A bruised ego beats a Titanic financial mistake: don't get too passionate about an investment.
- JamesLv 61 decade ago
Right now, I think that the shipping sector is general is quite undervalued as well as REITS. Both of these should come roaring back once the economy recovers, but they both pose significant risks. If the down turn continues for a protracted period of time, companies in both sector will eventually run out of cash and credit before the recovery rescues them - causing bankruptcies. I got into resource companies last year, and will hold them on through the next. I don't think they will give me the double to triple digit returns they did last year, but they should maintain fairly steady, unless the recovery takes hold, then they will run up some (though not as much as the battered shipping sector) except for mining companies that are into precious metals, they will probably take a bit of a hit.
Financial companies seem overvalued right now to me. They are currently raking in profits by keeping credit rates high while borrowing from the Fed at nothing. When the economy recovers, the Fed will raise rates and banks will not be able to raise their interest rates to consumers. Also, there is just too much regulatory reform in the works for this sector. While the laws have been passed, the actual implementation and regulations are still in the works, and it is looking pretty restrictive on financial companies.
- Anonymous1 decade ago
Yes, I agree that Resources are good, specifically, companies that control resources. I do not like to buy resources themselves because you then have to pay to store the stuff. If you want oil, take shares in a company that controls an oil resource.
I do not believe real estate should be avoided, but it should be bought carefully. REITS generally do well over the long term. Medical office buildings are very stable and offer a pretty steady return on investment. I think you can say that we are going to enter a very profitable time for Apartments. Those millions who are being removed from their houses are going to have to find some place to stay... I would avoid any area with a restrictive rent Control policy, but outside of that, I think you can do well in some specific areas on Real Estate.
I agree with you in the oil and precious metal picks. Oil is always safe, but the trick is finding the right company. You can make safe money with the giants, but you can't "strike it rich". One that I really have my eyes on is Nabors (NBR)
I think they are due for a huge spike coming up here soon.
As far as the precious metals go, I am specifically looking at two gold companies:
Barrick Gold (ABX)
Yamana Gold (AUY)
Gold is due for a huge rebound and I think that Barrick and Yamana are the two to watch closely.
Health care companies are also always a safe bet, and I think one that will particularly soar is Medco Health Solutions Inc (MHS).
Beyond that, I really like McDonald’s (MCD) to continue to do great. I think the fastfood chains and soft drinks (Pepsi-Coke) are good safe buys.
And, in also agreeing with you, I think that nobody in their right mind should be buying lending insitutions or real estate stock right now. The foreclosure crisis is just way too scary to be getting into any of that.
Best of luck and happy trading!
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I feel that we are heading in for a recession and have been well before the housing market "bubble burst". We have pretty much been just treading water it feels like and once the housing market collapsed and I expected for a year or so before it actually did. So as far as stocks or sectors to be in, I would probably be in "staples", agriculture, foods, utilities, raw materials, and a lot of overseas markets as well.
My best investment was and is in HYIPs (high yield investment program). A lot of people think they are scams as they tend to stop paying after a certain period of time but like any high yield investment there is always high risk. For me personally they have worked very well and you can start with investments as lot as $20. I have made about $2K+ on a $1.5k investment my self over 3 months.Source(s): hyipindex.net
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- 1 decade ago
China, India, Indonesia, Brazil and Turkey's economies are the most powerful engines to drive the global economy to stability said Sahit Muja the President & CEO of Albanian Minerals in New York.
Mr Sahit Muja said "China, India, Indonesia and Brazil were able to keep growing throughout 2008 and 2009.
China´s economic growth is estimated to record 10 - 11% percent annually on an average between 2010-2015"
"The Indian economy is poised to grow by double digits annually from 2011-2015.
Brazil's central bank this week upped its growth forecast for 2010 to 7.3 percent. Indonesia' economy is expected to grow 6.5 % this year.
Gross domestic product in Turkey increased an annual 11.7 percent, compared with 6 percent in the previous three months. Turkey have second fastest growing economy in the world in 2010".
Mr Sahit Muja said "China´s 1.32 billion population is a huge market for international and domestic demand for food, energy, oil, natural gas and metals. China have a strong driving demand for housing to meet the needs of 100 million people. Real estate demand in China will continue to grow because of migration of rural population to urban this will continue to drive housing demand, rather than a growing population as in countries like India, Brazil, Indonesia, Turkey and large parts of the Middle East. India's population in 2010 is around 1.15 billion people. Currently, India is second largest country in the world after China in terms of population. Population of India at the time of Independence was only 350 million. Indonesia's population is 235 million and growing. Brazil's population is 193 million and Turkey's population is 73 million one of fastest growing in the world".
Mr Sahit Muja said "Booming economy in China, India, Brazil, Indonesia and Turkey will help economies in The US, EU, Canada, Australia, Africa, Russia, Middle East and Latin America. From 2010 to 2015 more than 500 million new families will need new housing in the world. The 250 million new homes needed in China, India, Indonesia and Brazil. Growing economy and population will drive the demand for new roads, railways, airports, hospitals, schools. banks, infrastructure, water projects, energy projects, courts and legal system, new factories, houses, buildings, oil and natural gas refineries, power plants, wind energy turbines, solar power, cars, trucks, airplanes, ships , machinery and much more".
Mr Sahit Muja said "Growing demand for everything will create opportunity for new jobs in all sectors of economy. Agriculture sector in US and Latin America will grow as demand for food will rise. Financial, telecommunication and new technology's sectors will continue to grow and improve driven by strong demand and competition.
The emerging global economy needs more energy, oil, natural gas, metals. cement, rubber, iron, glas, steel, copper, silver,nickel, gold, aluminum, chrome ore, wood, agricultural products, urea, phosphate and other materials".
Mr Sahit Muja said "China, India, Brazil, Indonesia, Turkey, Albania and Kosovo will be on my top list to have Albanian Minerals & Bytyci SHPK are joint ventures and sister companies to trade and invest in the world's powerful emerging economies.
I have been working with partners in China, India, Brazil, Turkey, Indonesia and Albania the to move and capture the tremendous opportunity in the metal markets.
It will be perfect for any investor to invest in major industries in China, India, Indonesia, Brazil, Turkey in real estate, energy sector, food industry, tourism, IT, automobiles, cement, chemicals, consumer electronics, food processing, machinery, mining, petroleum, pharmaceuticals, steel, transportation equipment, and textiles. Textiles, jewelry, engineering goods and software , insurance sector, banking, stock markets. energy projects".
Mr Sahit Muja said "Many attractions to invest in China, India, Brazil, Indonesia, Turkey, Albania and Kosovo have been well-chronicled, but they can´t be emphasized enough. The US have a huge advantage in the global marketplace. The US Government and hard working American people need to move fast to capture the tremendous opportunity in global emerging markets. Now the game rules have change in world's markets. Is not true anymore, the big fish eat the small fish. Now in new world the fast fish will emerge as a winner in the top league of the world's emerging economies".
President & CEO
Albanian Minerals in New York
- Anonymous1 decade ago
I agree..That and healthcare, what with all the baby boomers .