January 6, 2010
America seems to be asking “What next?”
The U.S. economy has reached a point where
demand is returning. Enough people are buying stuff that corporate layoffs have
hit their lowest level since March of 2008. (Recall that was the month Bear
Stearns went under.)
though the 84,000 job cuts announced in December was more than economists
expected, it should be obvious that we are hitting something of a balance
between production and consumption.
mean that growth is ahead? Can we expect companies to start hiring in the near
future? Not necessarily. Companies will be hesitant to add workers until they
are simply overwhelmed with demand. It’s logical to think that companies will
opt to make do with what they have rather than take on new expenses.
the Labor Department’s report, 52,000 construction workers lost their job in
December. That’s the 35th consecutive monthly decline for
construction. Given the state of the housing market, commercial real estate
market and credit markets, it’s difficult to imagine a surge in demand for new
construction that would suddenly result in construction workers getting
there is, and will remain, a large percentage of unemployed that will stay
unemployed for some time.
other hand, however, we have to wonder how much companies overshot when they
started laying people off. Remember, it’s human nature to over-shoot, both in
the upside and the downside. It is these over-reactions that create buying and
selling opportunities in the financial markets.
no doubt investors over-reacted during the sell-off last year. It’s clear that
analysts have been far too bearish with their earnings estimates the last few
quarters. It would not come as a surprise to learn that some companies were
overly pessimistic and fired too many workers. I think the automakers have
almost certainly done this.
surprised to see an uptick in non-farm payrolls soon. Also remember to take
such an uptick with a grain of salt. Getting the economy balanced will lead to
some one-time surprises.
commercial real estate recommendation for Daily Profit readers is showing some life
today. Maguire Properties (NYSE:MPG)
is up around 12% on very strong volume. This is a speculative investment, but
the stock could have a lot of upside if Maguire is able to refinance some debt.
looking as though China will come out of 2009 with an
8.5% growth rate. Simply phenomenal. And don’t make the mistake of thinking
growth there is unsustainable. Consumer demand is improving. Toyota saw Chinese auto sales rise 21%
in 2009. That’s impressive.
know, I was bullish on China throughout 2009. And my SmallCapInvestor
PRO readers have benefited with
84% and 118% gains from two of my top Chinese recommendations.
China operated more like a corporation
than most investors realize. And that means it will continue to reward its
investors. So if you don’t have any Chinese stocks in your portfolio, I’d like
January 20, at 6 pm ET, I’m airing my latest video investment conference.
It’s called China Inc.: Understanding
China for Outstanding Profits. I’ll be discussing why China’s quasi-corporate structure will
continue to reward investors. I’ll focus on the sectors that will likely lead
to big investment gains for you. And I’ll be sharing some of my top Chinese
investments with you.
event is completely free for Daily Profit
readers. And with just 20 minutes or so of your time, you can come away with a
new perspective on investing in China that will reward you in the
months and years to come.
expecting a strong turnout for China Inc.: Understanding China for Outstanding Profits so
I hope you’ll take advantage of this opportunity to reserve you seat now.
Again, it’s free to attend, and I expect the available seats will fill up fast.
reserve your seat to the China Inc.:
Understanding China for Outstanding Profits video investment conference
01-06-2010 12:41 PM