What are the best stocks during recessions?

Question

On what industries would you bet during a recession? What are the best countercyclical picks?

Answer 1

During a recession, no stocks are immune. NO stocks. When the economy enters a recession, the best investment is t-bills. I will admit that some stocks will not fall as much as others. Beer companies tend to hold up rather well historically. And of course drug companies are always a safe bet more or less. Currently less so than more so.

Answer 2

I agree with the previous poster to a point, though I will elaborate. During a recession, the economy slows down, creating an outflow of capital (money) from inside the country to other nations, as more money is being spent elsewhere than in our economy.

As a result of this, the value of the dollar often decreases, and purchasing gold (or gold stocks of some sort) is a hedge against a declining dollar. In other words, the cheaper the dollar becomes relative to foreign currencies, the greater the appreciation of the price of gold.

This does not simply hold true in recession, either. For example, the US dollar continues to devalue relative to other foreign currencies even as the economy (especially if measured by the recent success of the stock market) is relatively strong. This occurs because of a deficit in our current account, meaning that more capital (money) is leaving the nation via imports than is being brought into the nation (via exports sold internationally).

As a result of this devaluation, investment in gold and other mining stocks can be attractive. One stock I would wholeheartedly recommend is Crystallex, a gold mining company operating in Venezuela. The ticker symbol is KRY, and in my opinion the stock is poised to rise dramatically, as they have recently begun mining an area believed to be filled with over 14 million ounces of gold. With that declining dollar, they'll be able to sell that gold to foreign investors for a handsome profit.

Answer 3

Companies that sell goods people always purchase tend to do better than most during a recession. Despite the financial conditions of U.S. markets, people will still buy food, soap, etc. Companies that purchase bad debt also do well during recessions. As more people are unable to pay bills, these companies receive more business from banks, credit card companies, etc.

Answer 4

You might want to consider the following Top10Trader portfolio of "bearish" investments:

http://www.top10traders.com/ViewPortfolio.aspx?userID=14

http://www.top10traders.com is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas.

Here are this month's best traders:

http://www.top10traders.com/Top10Standings.aspx

Hope this helps!

Answer 5

Jim Cramer is a nut. the Jim i'd listen to is Jim Rogers... i don't know about credit card stocks, but the way i see it is that when people no longer have their mortgages to use as their ATM, they'll go to the next thing, which is their credit cards. and you'll see a corresponding increase in defaults as happened with mortgages. i'd look for more bad news for the credit industry, a valuations crash, and wait for the dust to settle before even touching a credit card stock.

Answer 6

Gold & Silver stocks & Service Goods

Answer 7

Gold and silver stocks

Answer 8

Casinos.

Answer 9

none dont gamble yr money right now