This Company Proves Stocks Aren’t Dead…

by Louis Basenese, Oxford Club Senior Analyst

The Oxford Portfolio Update – February 12, 2009 (Broadcast #845)

I was only two-years-old when BusinessWeek ran its infamous “Death of Equities” cover on August 13, 1979… just before the Dow started one of the greatest bull-market runs ever.

The cover was one of the biggest blunders in publishing history. And the lesson shouldn’t be lost on anyone.

Stocks don’t die. They just endure tough times. And right now, we’re enduring…

Corporate profits are hard to come by. The credit markets remain frozen. The unemployment line continues to lengthen. Our government’s stuck on spend, spend, spend. And despite a rash of insider buying, on the whole, company executives don’t inspire much optimism.

Case in point, only 2.3% of companies raised guidance this quarter, the lowest percentage in a decade, according to Bespoke Investment Group.

But don’t let all the dire news or forecasts mislead you. Although, “The death of equities looks like an almost permanent condition,” as BusinessWeek famously quipped, history tells us otherwise.

The trick, of course, is to be invested as these tough times come to an end. And this morning an article from Bloomberg suggested we might be closer than many think…

Emerging Markets Defy Weakness

I’m paraphrasing, but the article basically noted how emerging markets are defying the recent weakness. And in turn, they might be sounding the “all clear” signal. The proof? The only major markets showing gains of more than 8% this year are China, Russia and Brazil.

As Bloomberg puts it, “Showing a resilience unimaginable in the United States” should not be ignored.

While I agree with the conclusion, I object to the methodology. Bloomberg only analyzed the world’s 15 largest markets.

I don’t know about you, but I’m an equal opportunity capitalist. I want the best of the best – big or small, developed or emerging. So I did my own digging. And I found the one country that outperforms them all.

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