It’s amazing to me that people are running around like the sky is falling lately.  Yes, the economy is in the depths of recession – there is no doubt.  And, it will probably go on for a while.  In fact, its likely to get much worse before it gets better.  In the coming months, we’ll see more unemployment, a stunning loss in retail sales…  It will probably be ugly.  But pretty, at the same time.

Why am I cheery?  Because with such losses, there will be incredible opportunities.  We just have to survive a bit longer in order to reap the benefits.  Yes, its difficult in these dark days to see it, but lets look at the facts: everything is cyclical.  Economies rise and fall.  It may not be fast, and definitely not as fast as we want, but it will come back.  And when it does, watch out – we are on the verge of what will probably be one of the largest wealth-building periods in the history of the country.

Prepare for It!

How can we prepare?  By staying alive.  Keep money in cash, stay out of risky investments and wait.  My dirty little secret: I hate the stock market!  The entire industry is no better than Las Vegas: It’s meant to separate you from your money.  The only difference between Vegas and Wall Street is that in Vegas (in most cases), no players know what card is coming out next.  On Wall Street, most people in the know already are aware of what will happen.  This means its inherently unfair for 99% of all retail players… UNLESS THERE IS A GIANT MOVE!

So, lets get ready now: horde cash, save, save, save!   Hold enough so you can survive for 18 months without work.  If you are lucky enough to stay employed, in about 6 months to a year, you’ll see some awesome investment opportunities.. because there is room now for that giant move.

The Opportunities

There are tons of awesome companies on SALE on Wall Street, RIGHT NOW – and it will get better!  Now, I hate to say that any company is totally safe as an investment vehicle, but lets be serious: How many of these solid companies will really go away?  Sure, Lehman and Merrill and some of the others turned out to be trouble…  But, which of these do you think will be GONE:

• Bank of America:  3.63 – down from year high of 43.46.  I just don’t see BAC dropping out of existence.  The stock hasn’t been this low since 1986!  A $20,000 investment today will buy you 5,500 shares.  WHEN (not if!) this stock recovers, if it were to just hit it’s high again, would net you almost $240,000.  Not a bad return – something worth waiting for!
• BP: $35, 1 year high of 77.69.  Oil isn’t going anywhere.  BP is 1/2 its value.  And, it pays an awesome dividend.  I see few negatives.
• BA: Boeing!  $29.65 – year high 88.29.  Yes, travel sucks now but these guys are golden.  This stock is on sale.  It may go lower, but I still like it.
• CAL: Buffett said, the quickest way to be a millionaire is to become a billionaire and then buy an airline…  But seriously, CAL is $9.69 right now, year high was $25.  I see this one rebounding.  UAL, AMR, DAL/NWAC I feel are in trouble and CAL has expanded in wise ways.  They have the newest fleet and have a different culture.  They will survive.  Oh, and they also fly BA planes only.
• AXP: Amex isn’t going away.  Hell, even Wyclef has them in his lyrics.  Amex is a consumer-oriented company with a good product.  Its $11.06 and has seen $52.63 a year ago.  Yes, they did convert their status to get TARP funds, but I still feel they will be survivors.
• DIS: The mouse is a survivor.  Honestly, the stock is where it was 12 years ago.  I love it – tourism will rebound.  ABC is running a better ship than CBS or NBC…  Go Mickey!

As you can tell, I’m interested in survivors…  Who won’t survive?  Well, I don’t know.  But I wouldn’t want to own these:

• AAPL: Steve Jobs is running out of time, people won’t want to pay 70% more for a computer with the same parts as a Dell, and every cell phone maker has their sights locked on the iPhone.  It just isn’t a smart play.  Don’t get me wrong, I love the iPod and iTunes and all that jazz, but there is not a lot of upside here right now.  Lets see what happens when Apple 2.0 (Post-Jobs) takes effect.
•  C: Citibank is a disaster, its not as clean as BAC.  I don’t know why they didn’t let it go.  33% owned by the feds and its diluted.  Good Luck!
• GM: The cars suck, the unions suck, the entire situation is bleek.  They may survive but should they?
• UAL/AMR: Despite my CAL above, I don’t like airlines.  I just don’t feel they will be able to survive.  Same problems as GM – too many unions and too many benefits being paid.  I like CAL’s approach to customer and employee satisfaction much more.
• GE: GE lost track of technology and became a bank.  This doesn’t bode well.  And, NBC is a disaster.  Their news organization is a joke, and their prime time selections have been poor for years (except the office!)

BEWARE

Well, you’ll have to wait for my warnings, coming soon in another post….  I have to keep you all in a state of suspense.  But, do some due diligence on the above companies!  Talk to you soon!