Are we at the bottom of the current economic collapse yet? Despite all the verbiage of the “experts”, nobody knows. This could be a deep recesion, a depression, or a fundamental change in the global economic structure. Even in the midst of economic distress, there are always a few businesses that prosper.
How can an investor make significant stock market profits during grim economic times? It might be worth considering that old military advice about what to consider before going into a fight: Bullets, Beans and Bandages.
Although we all hope that our current economic problems have nothing to do with military planning, major civil unrest, or war, the three B’s are still a useful guide to how you might make money in carefully selected stocks.
First, let’s consider Bandages. A bad economic situation would be made much worse by a serious disease outbreak, especially a disease for which we are not prepared. One potentially deadly threat looming on the horizon is avian influenza. Fortunately, researchers are hard at work on vaccines to prevent this rare disease from becoming widespread in people. One company to pay attention to is iBioPharma, Inc (OTCBB: IBPM), which owns commercial rights to technology developed by the Fraunhofer USA Center for Molecular Biotechnology in Newark, Delaware. This company has technology for vaccines against bird flu and other diseases. The interesting thing about their approach is that they use tobacco plants to produce the vaccines at a lower cost than other methods. In tough economic times, keeping costs low matters, and sometimes innovative approaches lead to lower costs.
Let us turn our attention now to the Beans part of the equation. Well known branded products are struggling in the stores these days and the companies’ stock prices show it. Have you taken a look at Procter & Gamble (NYSE: PG) or Kraft Foods (NYSE: KFT) lately? These are not speculative stocks, but their prices have fallen. By contrast, take a look at Family Dollar Stores, Inc. (NYSE: FDO). This company’s stock has actually risen over the past year. It sells low priced consumer products to people who can’t afford to shop in the higher priced stores. The number of people in that situation is growing these days.
Finally, let’s consider the Bullets part. Take a look at Smith & Wesson Holding (NASDAQ: SWHC) or Sturm Ruger and Co. (NYSE: RGR). Sales are rising and so are their stock prices. In uncertain times, it is natural for people to want to protect their families and property, so increased personal security spending could be good for these companies.
Disclaimer: This article is for information purposes only and is not intended to be interpreted as a recommendation to buy or sell any particular stocks or other investments. The writer of this article does not currently own any stock in any of the companies mentioned in the article.