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      02-23-2012, 05:37 PM   #32
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Join Date: Feb 2008
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iTrader: (2)

Originally Posted by Cheeserolling View Post
How about beer companies? Spring/Summer will be around and having a drink seems like a cheap way to cool off.
The market knows that those companies will have higher sales in those periods so that info is already priced in. If they beat estimates you could see a pop but higher revenue doesn't automatically translate into higher prices. Same with Apple, the market knows that new products are around the corner and are basing their valuations on pretty solid sales numbers.

You could make a case for defensive stocks but at the same time unemployment is falling, consumer confidence has been moving back up and the Euro debt crisis is coming closer to a resolution. Also, if you look at earnings, companies have been killing it but the market has still been relatively cautious, leading to the lowest P/E ratios we've seen in a long time.

Point being, you could make a good case either way. There's no right answer which is why your grade will come down to how well you can articulate your decisions, not your overall return number.

Just some things to think about...
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