Tuesday, June 29, 2010

Preparing for Depression

Hope for the best, prepare for the worst. I still have some hope that we avoid Great Depression 2.0, but it's still the most probable outcome. Which means that I am switching my investment strategy.
What works in depression? Staples: food, tobacco (addictive product), soft drinks (a little secret: most of US made soft drinks contain caffeine, making them addictive too), cheap restaurants, high quality high yield corporate bonds. And, something which is the best in America: tech, if you choose the right tech, of course.
On my shopping list so far:

Staples: Pepsico (PEP), General Mills (GIS).

Restaurants: MacDonalds (MCD), Yum Brands (YUM), Panera Bread (PNRA).

Tech: TBD.

Today I started position in PEP, it was low enough to trigger first buy.

Full disclosure: at the time of publication author had a long position in PEP and no positions in other stocks mentioned. Positions can change any time.

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