In the Long Term, Many Stocks are an Obviously Sweet Buy

Background
Looking at long term charts of virtually any mentionable stock on the market will most likely yield the same result, a glaringly obvious BUY. There are other reasons to get your money out of hard currency, such as the impending unprecedented inflation that will follow the Bush and Obama administration reckless handling of our economy and outsourcing to the Federal Reserve. The Federal Reserve, shrouded in secrecy, is a private organization which needn’t reveal its inner workings or meetings to the public, yet is in charge of the creation of currency and the interest rates.

Watch Out for These
Some stocks need to be watched, however, that they correspond to corporations that are safe from new legislation. Some of these may include arms manufacturers, as the future of the right to bear arms is possibly under threat under Obama’s administration and new Justice. Another potential victim is the health care industry, which include pharmaceutical companies. Add on to this military contractors, as so far the track record in the administration is we are already paying too much for heavy machinery (take for example the reduction of F-22 orders from Lockheed Martin).

Look Into These
Some strong stocks to look into for real returns over the long run are stable bank stocks, or banks that cannot go under without cataclysmic consequences to the economy (we know the US Gov’t wont let another Lehman Brothers fail). Among these are Citigroup (NYSE:C) and Bank of America (NYSE:BAC). A good example of an already partially recovered bank stock is Wells Fargo (NYSE:WFC). As you can see Wells Fargo underwent a reclaimation of value much earlier than C and BAC. My personal opinion of the two is that Citigroup will undergo the largest percent increase of the three. 10 year charts of these banks are shown below:

c

bac

wfc

Don’t Like Bank Stocks?

If you’re looking for a safer investment than bank stocks, then you might try chemical companies such as Dow Chemical (NYSE:DOW) or Huntsman (NYSE:HUN). In the last six months Dow has risen from less than $7 to today’s price of $21.10.  Huntsman has risen in the same period from the low 2 dollar range to $7. This is a 200% increase for Dow and 250% increase for Huntsman. They still have potential, though, as Dow was trading in the 40’s in 2007 and Huntsman in the mid 20’s in the same period. Both pay dividends and are profitable with a small P/E ratio.

If you hate stocks in general then I suggest putting money into cheapened real estate, precious metals, or even oil futures. Keep in mind all contents in this entry are speculative and no responsibility of loss is mine.

Oil Price Slip… Good for Economy, or Sign of Worsening Economy?

Or both? The recent plunge in the price of oil indicates that this most recent price hike was nothing more than a ruse, and that the oil tycoons are now putting down the prices just to keep us alive long enough to pay them exorbitant prices once again. The recent financial disasters including the Fannie Mae/Freddie Mac fiascoes and the utter failure of Lehman brothers prompted yet another price plunge in the oil sector as well as the retail sector. What this basically means is that people are afraid consumers will now buy less now that they have less.

Lehman brothers was an age old company with a place in the New York Stock Exchange since 1887 and went IPO in 1899. A few days ago it filed for bankruptcy protection, and is currently in the process of liquidation. Freddie Mac and Fannie Mae were originally government organizations that helped the banks finance mortgages. Recently Merrill Lynch was purchased by Bank of America at a cheap price thanks to the recent home mortgage crisis.

In any case, there will be a lot of financial folk about on the street looking for jobs. Alan Greenspan says that the events in this past month will be recorded as the most important in the last 100 years.