04-08-06 [finance] - 1

04-08-06 [finance]

God damn. After Katrina I picked Schlumberger and Valero (see rant 9-8-05) as good investments (also Fluor and Stolt Offshore), and they've done fantastically well, roughly +60% each. Unfortunately I didn't actually jump on any of them because I'm a pussy. Someone who actually took my investment advice would be rolling in it right now. In seriousness, I thought perhaps they were too big to see a major affect, and that the stock bump may have already happened. This is a mistake I seem to make consistently - I give the market too much credit for already having adjusted for very obvious things. For example if there's news out that company X is getting a huge government contract, I figure the market must've already accounted for that, right? Usually not, it takes a really long time for the stock prices to actually adjust to events, or perhaps they actually keep adjusting and over-adjust long after the fact, because tardy investors keep jumping in. In any case, what I find is that long after I identify a juicy sector and think it's probably too late, it keeps going up.

At the moment I don't see any really obvious industries to jump on. As I've written before I think the U.S. is headed for the shitter sometime soon, but that's hard to profit from, it's more of a thing where you can avoid a loss by getting out. (finance is like poker - you have to take your profit when possible, but sometimes the best you can do is minimize your losses; acheiving minimum loss is part of overall +EV play, even though it's still a losing play).

Alternative energy might still be a good sector to get into. If we get some democrats in power any time soon they might drop a ton of money on alternative energy projects which would send those small businesses through the roof.

Real Estate development in New Orleans is clearly a good opportunity. My dad suggested that construction companies in the gulf region might be a good way to capitalize on that. (it's hard to tap into the real estate directly because it's all private equity, though there might be a REIT focused down there that would be +EV).

The other continuing good investment is China. As China moves away from cheap manufacturing into better industries it provides lots of opportunities. High tech services in China should boom, telecom, power & other utilities, gas/oil providers, higher end retail & consumer businesses, real estate, etc. Basically we're going to see the boom of the Chinese middle class which will create a huge number of consumers for all the things Americans already own. Sholz sent me the cool China Stock Blog but I don't really know where to start. I hate jumping into stocks I know nothing about.

No comments:

old rants