OK, the summer is half gone, vacations are behind me now, and the strategic plan is moving along at work. It is hard to believe I have not been able to post anything in a little more than two months. Gosh! Well, is not like the market has been an inspiration either, right? We’ve had a very rough ride this summer, and even though we had a good rally today, I don’t feel very confident about the months to come. I mean, the economic situation is not looking exactly peachy, is it?And yet, when you look at the big picture, one thing you know for sure: besides Bear Sterns and a handful of regional banks, the good companies will still be there when this thing gets better. Because it will get better; it always does. There is light at the end of the tunnel. It may take a while, but the good companies, those that are worthwhile investments, will not only survive, but they will thrive. You see, in every economic downturn, there are always opportunities. Consumers don’t stop consuming; they just change their behavior. Their needs and attention shift a bit, but that only means that there are emerging opportunities to profit by meeting those different needs. In addition, the true leaders take the opportunity to create and strengthen competitive advantages. They emerge from these challenging times as stronger, more successful enterprises while leaving their competition in the dust. What a better opportunity than seeing your competition retrench because of the economic difficulties? For the best companies, that is just a call to jump in and occupy the space their rivals are leaving wide open in their retreat. And it is exactly in these times when we have the opportunity to spot those leaders and scoop their shares up at bargain prices. Sure, don’t bet next month’s mortgage payment on a hot stock. But this is exactly the right time to fatten the down payment for that dream house you are planning to buy in a few years.
What do we have to look for? Don’t go too far. Think of yourself to start with. What has changed in your own behavior as a consumer? You might be thinking twice about buying things than just a year ago you wouldn’t have even bothered questioning. And now you are looking with renewed interesting at certain things or places that a year ago you wouldn’t have even entertained acquiring or visiting. Well, those things and places (and of course, the companies behind them) are a good place to start your exploration.
I’ve been paying a lot of attention to what companies are doing in these hard times to lure customers; which companies are focusing on the right things in their marketing approach. As I affirmed in my post “Cracking the consumer code”, it is possible to spot great opportunities when you stop for a minute and look around with your mind set in finding good investment opportunities. I don’t mean paying attention to Jim Cramer or Barron’s. I mean attentively watching the commercials on TV, carefully reviewing your junk mail, and walking the aisles of the supermarket with your eyes wide open checking out interesting promotions or daring displays. Pay attention at how the companies are trying to talk to you: if even for a moment you stopped and listened, then there is a chance you are uncovering a hidden –or not so hidden- gem.
I like what I am seeing in areas like insurance, retail, wireless and electronics to mention just a few. I will share my observations with you in my forthcoming posts, which I assure you, will not take two months to show up!
