Wednesday, May 26, 2010

What investors buy when they are scared?

The last two years has been bloody and cruel to stock investors. S&P 500 has not even recovered the loss.
However, not all stocks shared the loss. Investors flocked to these stocks as consumers have been trading down from brand names to generic names, from departmental stores to thrift stores, from changing cars to sticking to old cars and fixing them up.

Thrift stores DLTR, FDO, NDN and auto parts companies AZO, ORLY and AAP are some of the names that benefit most from "trading down". Amidst a newfound fear of financial crisis in Europe, these names surged to new highs just recently as investors fled for safety.
[Click on diagrams to enlarge them]

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