Riding the Market’s Seesaw
08/25/2008 12:00 am EST
Louis Navellier, editor of Blue Chip Growth, says to stick with rock-solid stocks and commodities amid the market's turmoil.
Think of today's market as a giant seesaw, with commodity stocks on one side and financials on the other. A few months ago, energy and agriculture stocks rode up on surging commodity prices, while the credit crisis caused the financial sector to drop like a rock. Now, the opposite momentum is underway.
If you're wondering how even a brief rebound in the financial sector is possible, you're not alone. The reality is that this bizarre rally has more to do with emotions than economics. Unfortunately, some investors are just too frantic to do their homework.
But remember, other than the actions by federal regulators, nothing has really changed in the financial markets. It's only a matter of time before this movement reverses, and the money returns to our energy and agricultural companies. The same investors who've been selling off our commodity-related stocks will be running back soon, looking for a place to hide from the continued fallout from the credit crisis.
Our strategy all along has been to insulate our portfolio from the market turmoil and find stocks with great earnings that will profit big in the long term. I'm still confident in our strategy, and you should be, too. The seesaw is going to tip the other way soon, big time!
Baxter International (NYSE: BAX) not only put up a great quarterly report recently, beating Wall Street expectations, but it has also given hope to the estimated 12 million people who currently suffer from Alzheimer's disease. Its innovative treatment Gammagard, an intravenous therapy of antibodies derived from human plasma, was shown to be effective over a nine-month study.
This is great news not just for the company, but for all those people fighting this devastating condition. The company also recently declared a 21.75 cent regular quarterly dividend. Baxter rose close to 10% in the past month, and its innovative line of health care products make this a great stock to buy. (It closed above $70 Friday, near its 52-week high-Editor.)
Fertilizer play Mosaic (NYSE: MOS) [has been hit hard] despite its strong quarterly report. This company beat Wall Street expectations by 17.7% after it beat last year's numbers by four times over! Again, it's only a matter of time before investors get burned by financials and return to the fundamentally superior stocks on our Buy List. Mosaic has put up great numbers, and is a great buy with a lot of success in its future. (The stock closed above $107 Friday, down 34% from its 52-week high of $163-Editor.)Subscribe to Blue Chip Growth here.