January 2, 2008

2008 next top performers

Distressed investing seen as top 2008 performer | Reuters

Now that the new year is upon us, all media outlets are racing to produce 2008 investing guides. BusinessWeek, Cnbc, forbes...and all others have produced a list where to invest in 2008. The new year allows everyone to reset and 2007 realities and give investors a fresh start, but it does not work that way.

Economic realities from 2007 will carry forward and what was value in 2007 will remain as a value investment in 2008 and beyond. The mere fact that a new year came in does not make a stock attractive or a sector to perform better. Moreover all forecasts call for continued volatility mid way through 2008 and then all will be forgiven and thing will take off then. great sign me up! with no exception all talking heads and commentators have deemed June as the month where all of the capitulation will end and the bull market will resume.

You have to remember that if your investing to prosper you need to do the following:

  1. find companies that are under stress to no fault of their own,
  2. ensure that they have consistent growth in their cash flow,
  3. ensure that it is managed by great people with track records to prove it, and
  4. sit back and hold to your investment for the long run.

That is it do not try to project, predict, outsmart or find what will be hot in the next year because no one knows and no one will ever do.

Have a great 2008.


Anonymous said...

Just stumbled onto your blog. Very informative posts. You may want to analyze newspaper stocks for distressed industry but good cash flow companies e.g LEE. Regards Babui

Sami said...

Thanks for reading and for the comment.

I do not have enough experience in news paper economics and the industry in general. i try to limit my analysis to: real estate, consumer stocks and financials where I am familiar with the industry its players and the underlying economics of the business.