The economy is still in recession. The stock market is assuming the worst. Governments the world over are rolling out programs to boost the economy and nothing seems to be working. This maybe the best time to start putting your money to work (as always, do your own due diligence and invest according to your risk appetite)
President elect Barack Obama just announced plans for massive investment in rebuilding country’s infrastructure. Infrastructure upgrades are long overdue in this country and this does appear to be as good a time as any to focus efforts in rebuilding the old infrastructure in US. This spending will have the added benefit of creating new jobs (however short term) and this should help prop up the job market and jump start the economy. Overseas, the Chinese stimulus package is heavy on infrastructure spending. At the same time, many of the businesses in manufacturing sector that are likely to benefit from these programs are on sale today. While the opportunities to invest abound, what follows is a list of few selected names that I feel would perform well in the coming years and where I have already started taking new positions.
Private Businesses
If you own a private business in the manufacturing sector, consider ways of positioning your business to take advantage of the infrastructure spending to come. There are many things that you can do. You could for example get set up to bid on the federal jobs if your business is in a sector that will directly benefit. Or you could redouble your marketing and sales efforts to those companies that are likely to benefit, example being metals processing, construction companies, equipment manufacturers, large project companies like Bechtel and GE (new power plants, nuclear plants, wind energy installations, bridges, schools, etc). If you do not own a business today but are considering investing in a private company, you may wish to keep this in mind while you are picking your investments.
Owning a private business is risky and requires a lot of time commitment but brings with it a potential for great rewards as well as satisfaction of directly helping create new jobs and impacting the growth in the economy.
Public Businesses
Stocks are cheap today, but some well run companies are selling at unimaginable discounts. The following names are some of the few companies I think will benefit from the new public works program and have potential to deliver above average returns in the years to come.
Steel Dynamics (STLD): I know what you are thinking, commodities are cyclical and currently in a downtrend. I do not think this is true. Some of these commodities have sold off due to global demand deterioration and as the demand picks up, these companies will do well.
