The US economy is going into a recession. It's been pretty evident that things have been on the down turn for the last 6 months. First with the sub-prime loans, then the soaring gas prices and food prices (much as a result of the US inflating their money supply). What I should have been thinking about since the beginning of all of this is "what sectors are going to be hit in a recession?" and the answers would have been obvious. Anything and every industry that is has anything to do with "disposable income."
Starbucks is tanking, so is the auto industry. Airline stocks are falling and the tourism industry is taking a hit. I think upper end restaurant chains are going to tank, jewelry sales are going to plummet, consumer electronics sales are probably going to go down and more. If you know what you are doing, then shorting these stocks is the right move. Things aren't going to get better until the bad loans are cleared and banks have the confidence to lend money again. You should know that you're playing in a down market and the way to make money is by being a few steps ahead of the market.
No comments:
Post a Comment