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Investing during bad or hard times. |
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Written by FrontLine Assembly
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Jul 13, 2005 at 12:40 AM |
I think I will write a few entries about investing. Last week there
were terror attacks in London, several scumbag terrorists decided they
were going to blow up a bus and several rail cars, of course Al Qaeda
is taking responsibility for it.
Even though a very tragic event happened there can be some good that
comes out of horrible events around the world. Last week when the
attacks hit since it was the evening here in the US the US stock
markets opened up quite a bit down, the DJIA lost about 19 points as
did the NASDAQ 100 along with every other tracking stock or exchange
traded fund.
That was the time to buy! If you bought Diamonds (SPY), SPDRs
(SPY) or QQQQs (QQQQ) on that day by the end of the next trading day
you would of been up and even after giving up some points today you
would still be ahead.
Going back to another tragic event, September 11th, 2001, if you had of
bought a market tracking stock on September 17th or 18th when the
markets re-opened you would be up over 25% on your money. You would of
been up even higher if you bailed out at the absolute peak last year.
(somewhere about 32%)
{mosgoogle right}
That is just touching the surface, after any terrorist attack you have
to consider what sectors would benefit most with the aftermath of an
attack, namely defense and security companies. If you bought something
like Armor Holdings (AH) on 9/18/05 you could of sold it at it's peak
around the beginning of the year at a 30% profit, today it would still
be a modest 10% profit. Raytheon another defense stock would is at a
25% gain. 25% might not seem like that much of a gain but when mutual
funds are barely reaching 3-5% and even a CD rate is less than 5% you
can't beat it. Also if you consider that 25% of 50.00 is 12.50/s that's
not bad, most defense stocks also pay a dividend which isn't even
factored in to the earnings.
Ok so now you have your defense angle covered so now you need to think
about what other industries were hit hard, since September 11th dealt
with airlines anything that was heavily dependant on tourism would of
been hurt bad. This will lead into my next entry about vice stocks.
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Last Updated ( Jul 13, 2005 at 01:03 AM )
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