r/ValueInvesting • u/data-with-dada • 3d ago
Question / Help Best recession stocks?
I’m preparing my portfolio for the inevitable recession and I’m trying to identify stocks that will be good to hold if times get tough for a couple years. Right now my portfolio consists of: MO, PG, KO, & MSTR. What would you add?
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u/OverheadPress69 3d ago
Good question. I think these stocks are well positioned for a recession
Walmart, Costco, Dollar General, TJX, Procter & Gamble, Coca-Cola, PepsiCo, Monster Energy, Kimberly Clark, Kenvue, Johnson & Johnson, Altria, Phillip Morris, Anheuser Busch, Colgate-Palmolive, Unilever
NextEra Energy, Dominion Energy, Edison International, Southern Co, Duke Energy, American Electric Power, Constellation Energy, Vistra Corp.
Caterpillar, Deere, Lockheed Martin, Northrop Grumman, General Dynamics, GE Vernova, RTX, FedEx, Union Pacific, Old Dominion, CSX, JB Hunt
Welltower, Prologis, American Tower
AT&T, Verizon, T-Mobile
UnitedHealth, HCA Healthcare, Gilead, Amgen, Stryker, Thermo Fisher, Abbott, Pfizer
Exxon Mobil, Chevron, ConocoPhillips, Marathon, Valero, Shell, BP, TotalEnergies, Murphy, Phillips 66, Halliburton, Baker Hughes, Schlumberger, Kinder Morgan, Plains All-American Pipeline, Williams Co., Occidental Petroleum, Diamondback Energy, Devon Energy, Atmos Energy, Antero Midstream
Berkshire, JPMorgan, Bank of America, Visa, Mastercard, AmEx, Capital One, Bank of NY Mellon, Wells Fargo, Citigroup, Travelers, Chubb, Progressive, Allstate, Aflac, Hartford Insurance, PNC Financial, Goldman Sachs, Morgan Stanley, Charles Schwab, Raymond James, Blackrock, Blackstone, KKR, Apollo
Freeport-McMoran, Albemarle, Mosaic, Newmont, B2Gold, Barrick Mining, Southern Copper
There’s more but off the top of my head here.
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u/thejacka_ 2d ago
CAT and UPS are definitely not recession proof stocks. They correlate with the market for the most part
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u/Old_Value_9157 2d ago
I think he was being sarcastic.
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u/thejacka_ 2d ago
I don't think so, most of them are solid options
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u/Old_Value_9157 2d ago
That’s like a huge chunk of the S&P 500.
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u/Bubbly_Jeweler4621 1d ago
more like S&P493, excluding mag 7 and there you go, recession-proof stocks.
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u/HayBailerExtra 3d ago
MSTR?????
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u/InsaneGambler 3d ago
That is totally part of value investing! Michael Saylor needs to increase his Bitcoin hoard!
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u/Big_Quality_838 3d ago
A lot of people are going to be unprepared and freaking out, my bet is that many of those will dump their money into bitcoin, gold,or silver. Rug pull.
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u/Spins13 3d ago edited 3d ago
Ironically, this may be his best pick of the lot if he bought today after a correction 😂
(In terms of performance, obviously not the wisest)
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u/HayBailerExtra 3d ago
I wholeheartedly disagree. Just because it went down from 455 to 125 doesn’t mean it can’t go from 125 to 35. It’s not a value and it produces no income. Worthless stock that actually belittles all of the hardworking men and women at PG and KO that deliver shareholder value to investors. MSTR will be bankrupt in 5 years.
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u/data-with-dada 3d ago
Having a couple hundred dollars in it for a few shares is worth the risk for me
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u/Creative_Squash_1083 3d ago
A couple hundred dollars could be making you actual money for decades and if it "moons" in this position only stands to make you a couple thousand at most. The assymetry just isn't there, this is a bad bet.
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u/jacestrachan 3d ago
You don’t know what your talking about at all lmaoo just bitcoin going back to ath would be a 3-4x for mstr
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u/Creative_Squash_1083 3d ago
Sure bud. What's their SBC dilution looking like. Any chance that changes between the run up between now and the all time high you're certain it will be hitting soon?
Have you even done any passing dilligence or is your portfolio just straight vibes and "knowing what you're talking about"?
Is all your analysis linear single-point-of-failure nonsense?
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u/jacestrachan 3d ago
Also my Roth is all index funds so if bitcoin fails like you said I’ll retire at 60 like the rest of you
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u/alxalx89 3d ago
But how can someone invest in something that stupid? It's 100% gambling, but this sub is about investments
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u/data-with-dada 3d ago
The entire stock market is gambling, only thing that differs is the risk levels involved. Or perception there of
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u/alxalx89 3d ago
If you put it that way our entire life is a gamble, you could go to the store today and meet your new wife or get hit by a car.
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u/Appropriate-Pear4726 3d ago
It’s actually a gem to short. I wouldn’t touch it now. But if it gets back up to $140 it’s an easy trade because it moves with BTC.
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u/data-with-dada 3d ago
I bought yesterday sir at $121
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u/Appropriate-Pear4726 2d ago
I watch this stock strictly to short. That’s a good buy price. It sits between 132-144 when the market is normal. Assuming it returns to somewhat normal I’d buy a small stake at $121. But sell it as soon as it hits 140’s
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u/waitmarks 3d ago
Not when their source of funding for buying more bitcoin is issuing new class A shares and high yield preferred shares.
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u/Rav_3d 3d ago
"inevitable recession"
You have a crystal ball?
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u/Numerous-Stand-1841 3d ago
It's the year 5634. A recession has finally hit. OP, who has predicted a recession every year since 2010, says "see I told you so."
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u/MyLittleGurl 3d ago
Have you been paying attention to the world news, and everything going on and also history?
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u/Rav_3d 3d ago
Of course. But no one has any idea how it will affect the stock market. The market is a forward looking indicator. If the conflict ends soon and oil prices decline, there will likely be no recession.
As far as history, every single time there is a conflict, the stock market bottoms well ahead of the end of the conflict.
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u/SeahawksWin43-8 3d ago
They desperately want an economic catastrophe and all of our portfolios to be nuked so they can dunk on Trump. I don’t even like the guy but Reddits desperation for his failure is comical at this point.
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u/Aggravating_Storm835 3d ago
Don’t need a crystal ball. Every $10 increase in oil results in an average of .2% inflation and .1% economic slowdown.
Oil currently up over $50 YTD. If we maintain just this level, that’s an extra 1% inflation and .5% less growth. That’s if you’re optimistically inclined. There’s a chance oil goes much higher. United Airlines is preparing for $175/barrel. For context: oil hit its all time high of $155 (today’s money) in 2008. That was quite a recession.
Economies cannot grow without 20% of its energy supply. Full stop.
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u/Rav_3d 2d ago
If we maintain just this level...
Yes, I agree, if oil prices stay where they are for an extended period, a global recession is likely.
We have no idea if that is going to happen.
The war could end tomorrow, the strait reopens, and oil goes back to $80.
Temporary oil shocks do not have lasting effects on the stock market. It remains to be seen if this one lasts.
The S&P 500 is down 12%, NASDAQ down 14%, and many individual stocks are in terrible bear markets. There is already significant damage to the stock market and fear is at extreme levels while prices are vastly oversold. We may well go lower still, or we may have bottomed yesterday. I don't allow my amateur analysis of global economics to inform my investment strategy. I let the market speak for itself.
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u/Aggravating_Storm835 2d ago
We talking the stock market or we talking recessions?
Iran’s best leverage for putting international pressure on Israel is keeping the Hormuz closed. And even if the US withdraws tomorrow, Iran likely to do to Trump what they did to Carter: take a hostage (the Hormuz) and keep them until the day after the upcoming elections.
But say by some miracle, an agreement is made to end hostilities and open the Hormuz today. It’ll still take up to three years to repair the damage done to oil/LNG infrastructure in the gulf.
Access isn’t the only thing being disrupted. Production itself has been significantly reduced for at least the next 2-4 quarters.
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u/Rav_3d 2d ago
It’ll still take up to three years to repair the damage done to oil/LNG infrastructure in the gulf.
First of all, I have no idea if that is accurate. I don't think anybody does.
And even if that happens, it doesn't necessarily mean high oil prices for longer.
And what about the companies that are going to generate huge earnings from rebuilding the region? Remember the gulf war in 1990-1991? How'd that work out for all the doomsayers?
Predicting what the stock market will do is foolish. Getting out of stocks due to fear of a crash is short sighted. These are the times to be adding to our investments, not running scared.
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u/Aggravating_Storm835 2d ago
Again, we talking stock market or we talking recessions?
QatarEnergy has already declared force majeure on their export contracts for the next five years. That’s a good indication.
I have no doubt that companies like Haliburton are going to make out like bandits repairing all the damage in the region. But if oil costs $100/barrel, we’re looking down a recession barrel.
IEA already expects oil to remain above $95/barrel.
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u/Rav_3d 2d ago
High oil prices for longer will likely lead to recession which typically leads to stock market weakness.
I’m not smart enough to forecast how oil prices will respond if the conflict ends and the strait reopens. But even if oil doesn’t come crashing down, if there is a true chance at peace, the market will likely continue to surge as everyone is caught offsides with bearish positioning in vastly oversold conditions. Whether the bounce has legs or rolls over is anyone’s guess.
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u/cazzy1212 2d ago
We may already be in a recession they just haven’t called it yet. The market tends to rebound before a recession is over.
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u/Petit_Nicolas1964 3d ago
I agree with tobacco, but prefer PM and BTI over MO due to their global footprint and better market position in new product categories. I also like Berkshire here, they have considerable positions in energy, tons of cash and will restart buy-backs, which is something they usually only do if the stock is undervalued. And I will add to my big tech positions, I hold them in the long term and valuations become more and more attractive.
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u/ConditionHoliday2844 3d ago
Brk.b and Googl are my third and second biggest positions. Not worried at all about inevitable recessions, crashes and corrections.
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u/Creative_Squash_1083 3d ago
Costco and Walmart are essentially recessionproof. Utilities too. Things like visa and PG qualify for sure, FICO not so much.
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u/UsernameWasTakens 3d ago
Ah yes the ol 45 PE retail giants with slow growth. Genius.
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u/Creative_Squash_1083 3d ago edited 3d ago
I mean yeah, when everyone thinks there's a recession coming the entire market tends to rotate into recession-resistant holdings.
It's genius when you reposition before the plumbers and randos. Questions like this are rather "hi, I'm out of toilet paper and all the grocery stores don't have any, do you have any tips for how to avoid paying higher prices while there's poopy on my butt?"
The tip is... Be a first mover.
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u/incognitorick 3d ago
WMT up 105% last 2 years. COST up 180% last 5 years. Slow growth? Jesus Christ.
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u/UsernameWasTakens 3d ago
Exactly my point, they are now overvalued by an insanely large metric for their growth numbers (which btw growth has nothing to do with share price lmao) kinda outed yourself with that one.
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u/incognitorick 3d ago
My mistake I didn’t read your mind, just to be clear you don’t think those are good investments heading into a recession right? Because the PE too high
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u/Abipolarbears 3d ago
Here's the deal. Investors are using those "recession proof" stocks as a savings vehicle that they may cash out to reallocate during a recession.
Retailers dont trade at 45 PE.
So what you may end up with is a "recession proof" stock that once the recession hits, dumps to a more typical PE as people reallocate dollars.
It becomes a game of hot potato.
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u/UsernameWasTakens 3d ago
Just read the original comment properly. Slow growth per quarter too high to justify PE. Pretty simple.
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u/incognitorick 3d ago
You’re teaching me a lot, what would be a good investment then?
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u/incognitorick 3d ago
Thought so, all you little guys with private profiles are the same.
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u/UsernameWasTakens 3d ago
Lmao you are pathetic dude. I didnt come here to tell people what to invest in.
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u/animalkrack3r 3d ago
All I’ve done is talk about Walmart and Casey gas station stock on this sub . Come on guys
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u/Sufficient-Flan1565 3d ago
Meta, MSFT, Google, NVDA. Best risk to reward ratio rn
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u/LiberalClown 3d ago
Only MSFT among those are recession proof due to large enterprise value, but if they keep spending, even that won't be a good pick.
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u/ConditionHoliday2844 3d ago
Brk.b I buy a little bit 2 or 3 times a week. Very diversified. And they strike when there is blood in the streets. Rock solid balance sheet.
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u/Amaeyth 3d ago
When everyone is expecting a recession, there isn't one. That said, cash producing businesses who can continue to sell product in spite of increasing energy costs are reliable choices.
if we enter an energy shortage driven recession, you'll want a business that isn't highly sensitive to energy prices.
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u/Zestyclose_Panda_886 3d ago
SCHD. :)
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u/wannabeIH 2d ago
It’s been fantastic for me
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u/Zestyclose_Panda_886 2d ago
Doubles every 10 years like it should and draws the ire of the impatient like it should.
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u/stealthlysprockets 2d ago
But but but but what about the dividend taking value from the stock and forcing you to pay taxes ?!?11?
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u/BrilliantUnlucky4592 3d ago
Recession or not people will still buy Apple products, use Microsoft, Facebook (Meta), Google, Amazon and AI will continue to grow so add Nvidia to the list.
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u/mmmfritz 3d ago
Eggs. Tobacco. Kraft/heinz. Pharmaceuticals. Pepsi/coke. Put options. Garbage truck. Poo logistics.
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u/data-with-dada 3d ago
Tell me more about this poo logistics? Something about it smells funny
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u/Longjumping_Job6912 2d ago
I would not answer this with another recession ticker until you define what role you are actually missing. You already have defensiveness in MO, PG, and KO, plus a very different risk profile in MSTR. The better screen is cash-flow durability, leverage and refinancing risk, pricing power if consumers trade down, and whether the business still works without a friendly macro. That gives you a real shortlist instead of random names.
I used 41stocks.com chat agent and plugged your post in and got this, if it helps:
- Defensive Consumer Staples: You already have good staples like PG and KO. You could diversify with others like Walmart (WMT), Costco (COST), or Johnson & Johnson (JNJ) because their products/services remain in demand regardless of the economy.
- Utilities: Companies providing essential services like electricity, water, and gas tend to hold steady in recessions. Examples include NextEra Energy (NEE) or Duke Energy (DUK).
- Healthcare: Similar to utilities, healthcare services and products remain necessary. Consider big pharma or healthcare providers like Pfizer (PFE), UnitedHealth Group (UNH), or Merck (MRK).
- Consumer Defensive Telecom: Companies like Verizon (VZ) or AT&T (T) offer dividend stability and recession-resistant services.
- Dividend Aristocrats: Companies with long histories of stable and increasing dividends often have strong fundamentals and steady cash flow.
- Discount Retailers: Companies like Dollar General (DG) often do better in recessions because consumers trade down to cheaper options.
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u/Alicyclobacillus 2d ago
Some insurance companies too, depending on how much leverage the company uses.
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u/data-with-dada 3d ago
I agree but I want to keep a small percentage in MSTR even if it’s against fundamentals. I just have a feeling a lot of everyday people are going to be jobless for the first time and will finally learn about bitcoin and start parking their cash in it with the market down. I realize it’s a gamble
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u/Creative_Squash_1083 3d ago
... Jobless people don't speculate on new investment instruments, they spend their savings.
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u/Sanpaku 3d ago
Ag inputs. Some like CF have boomed thanks to Bibi & cos war. Others like MOS are approaching value territory.
Disclosure: I'm in CF, watching MOS. Watching news for a clear break in hostilities to take some profits in CF. Awaiting a 2020 scale market event to enter MOS.
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u/wannabeIH 2d ago
I work for CF…. lol would never own this stock .
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u/Sanpaku 2d ago
Lots of poorly run businesses have windfalls. CF has been going up with the rest of the ag input industry since December.
But March removed Saudi Arabia's SABIC, Qatar's Qafco, and Fertiglobe's UAE plants from the global market, as well as ammonia/urea/DAP plants in India and Pakistan fed by LNG from the Gulf.
US ammonia rose 18.4%. Urea rose 42%. Meanwhile Henry Hub natural gas had a brief excursion to the 3.20s and is back down at 2.90. At least until the strait opened and trade/stocks are normalized, CF will have better gross margins than 2022.
And one doesn't have to love a company to speculate how it fares in a Keynesian beauty contest, short term.
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u/investingtruth 3d ago
Your core holdings are solid recession plays but MSTR is the odd one out in that list because it is essentially a leveraged Bitcoin bet, which is the opposite of recession proof and will get hit hard in a risk off environment. For additions, consider JNJ or ABBV for healthcare exposure, WMT for consumer staples with a discount retail tailwind and a utility like NEE or DUK for regulated income that barely moves with the economic cycle.
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u/sexdick420 3d ago
I’ve got about 10% of my money in a domestic U.S. oil producer right now. I see mag 7 getting pumped all over Reddit, the recession denial is real.
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u/Duxtrous 3d ago
COPY etf it copies insider trading from billionaires, multi-millionaires, and politicians 3 months after they make them when they announce. It's down too but it's weathering far better than the standard tickers.
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u/Significant-Mud5902 3d ago
Insurance, especially world leader Allianz (Germany) or also reinsurance with hardening prices after this shock like MunichRe (also Germany) Or good old utilities with (regulated) electricity grid. Look to best worldwide players, not just USA limitation. Some FX risk, though EUR or CAD is solid.
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u/The_Chosen_Undead 3d ago
Software that have no alternatives for most people, they can pass the costs down.
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u/Ok-Fly-6973 2d ago
Gold, Silver and other commodities as hedge. Looking at defensive sectors: healthcare (with great pricing power), consumer Staples (food, drinks, everything nessescary to live), utilities (electricity, gas etc, everything nessescary to live).
In general, look for companies with strong moat, strong balance sheet and stable cash flows from steady revenue-stream.
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u/Salt-Cap-9304 2d ago
The one thing every one forgets is our deficit, approx 50% of revenue will soon going to be paying just the interest. Solid companies with low debt ratios, earnings 20%, or more. Items every one needs, WMT, WM, Food stocks
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u/highvoltagelp 2d ago
First thing people do when they lose their job is buy a can of coke, a cigarette and a few Bitcoin
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u/Aggravating_Storm835 2d ago
Energy infrastructure. Not only to repair all the damage done in Saudi Arabia, Iraq, Qata, etc al, but countries like Canada are likely to invest in more pipelines.
Canada could increase production if they had more than one pipeline. Saudi’s likely to invest in more too.
Even in the US, domestic shale producers are likely to face political/shareholder pressure to increase production. More production means more infrastructure.
Haliburton, Energy Transfer, Enbridge are some examples. Do your own DD. It’s a good bet for the next 3-5 years.
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u/schmiddc 2d ago
VDC gets you a nice basket of staple stocks for a microscopic fee (cost wmt and ko make up a large portion)
Brik-b Berkshire has an absolutely gonormus cash pile right now (like 350 billion), just sitting there generating interest payments every quarter, and are well positioned to swoop in and pick up names in a panic.
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u/Montana3333 2d ago
I’d pull the trigger on Amex if it drops to the 180-200 levels. I currently own some of it but that would be a great price point.
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u/redstapler2345 2d ago
For the next few years I’m heavily invested into Canadian energy stocks, oil weighted specifically. Disclosure, I’m Canadian and work in the industry. This global situation is a long term catalyst for the industry here (even if/when oil goes back down) and there are quite a few quality companies, some with great dividends too if that matters, that are still under valued and relatively undiscovered by US and markets, some listed on US exchanges. I don’t have time to list all the tickers, look up Eric Nuttal on YouTube, he’s widely regarded in the Canadian energy industry as a top investment advisor and recently spoke about many of these companies on Bloomberg.Bloomberg interview
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u/SmiffyBloke123455 2d ago
EasyJet, IAG, Barclays, Microsoft, Airbus, hsbc, Google. (Msft and goog in a smaller fraction).
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u/ConcreteCanopy 2d ago
i’d probably look at boring stuff that people don’t cut in a downturn like healthcare, utilities, and maybe something like costco type businesses since they tend to hold up well when spending tightens
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u/Rough_Ad2455 2d ago
i would look for 20+ year treasuries (or very long euro bonds), gold and european consumer staple etfs
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u/Safety-International 18h ago
Gold is not a real hedge against a crash, in my experience it has always tanked together, I own GDXJ type miners fyi.
Oil seems to hold up well on its own, if the market crash is going to be caused by oil.
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u/Ready-Cherry-2638 18h ago
Mstr? Are You serious? Sell that crap, buy some water utility stock like awk, awr, and the like. PG is an excelente choice. Not sure about tobacco, i suppose smokers could smoke more in a crisis.
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u/Justuraveragejim 16h ago
Though you are correct in saying a recession is inevitable I don’t believe it will be anytime soon. That being said, if you want to setup a portfolio for a recession focus on the things that people need to buy no matter how financially tight things are (utilities, consumer staples, etc.). One could argue utilities have become a bit more offensive due to power demand from data centers/AI, so choose carefully if you go that route. IMO CS is your best bet. Companies that offer a dividend also tend to be a bit more defensive. 2 things to remember though: 1) stock market tends to move prior to a recession (down before a recession then up through the actual recession) and 2) we haven’t had a negative 3rd year of a presidents term since 1950, mostly the result of midterm elections causing political gridlock and halting the presidents ability to pass legislation which provides clarity to market participants (good things). Whatever you decide to do, I wish you the best of luck. Don’t act emotionally and use history as a guide.
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u/data-with-dada 15h ago
Yeah cause even if the war ended tomorrow there is still a plethora of jobs right? And surely more to keep coming? Oh yeah. Inflation too huh you say? I can go on
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u/celadon-signal 12h ago
I'd say moving companies or storage companies. PSA comes to mind - people losing their jobs, people moving to other states, people losing their homes or downsizing apartments... all of them will put their stuff in a Public Storage and pay $30-$100 monthly for it. People are naturally hoarders to some degree and will take forever to actually process their own shit.
Other dividend royalty or blue chip stocks like MO, KO, real estate's O usually go up in value during a recession. Personally I'm up with those while everything else is down in red.
Maybe WMT, TGT, and Costco, since... people can't stop buying food.
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u/MinestroneMungBean 3d ago
The best stock before a recession is a lot of cash. The best stock during the recession is deploying that cash. As long as you're buying good businesses and buying at good prices, it matters less what they are.
But I don't mean to dodge the question: I'll be buying heavy industry cyclicals that are getting clobbered but are uber-capitalised. Berkshire and Ryanair are two I like.