The Poorhouse Portfolio for Pessimists

<span style="color:#333333;font-family:'Lucida Grande';font-size:11px;white-space:pre-wrap;"><p><span style="font-size:13.0pt;font-family:ArialMT;">We&#39;ve been hearing some dire predictions for the economy in both the near term and long term. Some seers are predicting a long, deep recession, while the most pessimistic pundits are even beginning to use the d word: a depression. In any case, there&#39;s not much good news on the horizon, so I&#39;ve put together a portfolio that should withstand hard times without sinking like the Titanic. </span></p><p><span style="font-size:13.0pt;font-family:ArialMT;">I don&#39;t necessarily recommend these stocks. This list is just to give you some ideas and some stocks to watch. All of us are learning and taking notes as we go along in this market of unprecedented volatility. If we are indeed in the middle of a long trough, there are certain stocks that should survive a long downturn better than others. I&#39;ve included some typical bear market stocks and added others that I think might be new additions to traditional hard-times stocks.</span></p><p><span style="font-size:13.0pt;font-family:ArialMT;">The Education Refuge: During downturns, when jobs are being lost, some job seekers decide to upgrade or retool their skills. There are several purveyors of education that have done well so far during the downturn, but the one that appears strongest to me in its fundamentals is Apollo Group (APOL).</span></p><p><span style="font-size:13.0pt;font-family:ArialMT;">Sticking to Soup: A staple of a downturn would seem to be soup, but Campbell’s (CPB) most recent report was poor. I think a better alternative could be Ralcorp (RAH), which turns out even cheaper canned soups and vegetables that are sold under the names of supermarkets, etc.</span></p><p><span style="font-size:13.0pt;font-family:ArialMT;">Divine Discounts: The discount stores are all faring better than upscale and middle-class purveyors like Nordstrom’s and Penney’s. There are four strong contenders in this category, BJ’s Wholesale Club (BJ), Wal-Mart (WMT), Costco (COST) and Dollar Tree. But I think the standout in this group, based on recent reports, is BJ’s.</span></p><p><span style="font-size:13.0pt;font-family:ArialMT;">Quick Stops: Another category of stocks that is doing fairly well during the downturn is convenience stores, largely because gas has gotten cheap and folks are buying small amounts of food and snacks along with the gas. Pantry (PTRY) has the best balance sheet in this category, in my opinion.<br></span></p><p><span style="font-family:ArialMT;font-size:17px;">Still Need Soap: Some pundits are pushing Proctor &amp; Gamble (PG) as a recession-proof stock, since we all want to stay clean, even when we&#39;re sweating the economy, but I like the looks of Church and Dwight (CHD) better. Everyone still needs baking soda and the company&#39;s other cleaning products.</span></p><p><span style="font-family:ArialMT;font-size:17px;"><span>Lipstick on a Pig: You can’t put lipstick on a pig, making anything pretty out of this downturn. But women are going to keep buying lipstick, come h*ll or high water, and we like Revlon’s cheap prices and the stock’s cheap price. (REV)<span> </span></span><br></span></p><p><span style="font-family:ArialMT;font-size:17px;">IMPORTANT: Again, these are just ideas and NOT recommendations. It&#39;s important to think outside the box during a panic like this and to do very careful research. Make your own watch list, using the Yahoo Finance page, so that you can create a portfolio and try out your ideas without risking anything. The very safest place for your money right now is in short-term treasuries rather than stocks.</span></p><p><span style="font-family:ArialMT;font-size:17px;">C.F. Chapman, </span><span style="font-size:17px;"><a rel="nofollow" href="http://www.womanwithportfolio.com">www.womanwithportfolio.com</a></span></p><p><span style="font-family:ArialMT;font-size:17px;"><br></span></p> <p><span style="font-size:13.0pt;font-family:ArialMT;"> </span></p> <span style="font-size:13.0pt;font-family:ArialMT;"><span> </span></span> </span>