stocks that do better to bear markets

Brandonf · Jan 6, 2008

Quote from tradestrong:

Well no stocks of companies are "perfectly" negatively correlated with the markets. But if you're looking for the best opportunities in a bear market, you need to ask yourself, "is this a company that will attract business in a bad economy".

As an example, car parts manufacturing companies generally do well in bear markets. The reason should make sense, people are more apt to repair their current car than to replace it if their jobs aren't secure.

So basically, strong companies with business models that attract "less wealthy" customers are probably going to have the best returns during those times.

Just look at your own buying habits. How do you save money? What types of products do you look for when money is a problem or less plentiful? Starting with your own habits and tendencies, you can extrapolate this out to the broader market which should help you "find" those companies best aligned for the bear market.
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Also, even in a bear market there are sectors that will experiance a bull market. For example in the 2000ish bear market the homebuilders broke out and started their own bull market. Look at sectors that are doing well and then follow the better companies and stocks in that group.

Brandon

Eliot Hosewater · Jan 6, 2008

How about Utilities?

ggoyal · Jan 6, 2008

commodities are the leaders so far. We are going to be trading mainly utilities, oil&nat gas serv., gold etfs. stuff like devon or chesapeake.

shorting the financials.

we also don't believe there is anything that should be pushing the markets up.

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stocks that do better to bear markets

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Eliot Hosewater

ggoyal