We long ago identified Walmart (WMT) and McDonald's (MCD) as two havens to hide out in as the longer term "Pooring of America" intersected with "the recession" played out. (Dec 26, 2007: Target Shoppers Turning into Walmart Shoppers) (Apr 22, 2008: McDonalds, DuPont Continue the Trend - Overseas Strength Mitigate Weakness at Home) (Jul 23, 2008: McDonald's Continuing to be Dinner of Choice for Pooring Americans)

That was the play about 15-18 months ago - but what is interesting is these have become crowded trades as the "whistlers past graveyards" of fall 2007 - spring 2008 turn into converts once the recession became apparent. Even Ken Heebner of CGM Funds has become a convert in the back half of 2008 (Nov 14: Ken Heebner Moves into Financials Big Time) Both charts have turned negative here of late, especially Walmart's. I'm not sure what the price action actually means in terms of fundamentals for these two - but it is very interesting.


Anyhow, McDonald's is getting a lot of love in the press - which many times means "everyone knows the story" and it's time to move on to the next thing ;) We shall see if we are witnessing recent tops or just resting points in these names. I continue to believe this recession will be a long and dreary one so weakening stocks could either signal (a) I'm wrong and it's going to get better sooner or (b) things are so bad even these bastions of recession are suffering. Or it could simply be that everyone who wants to be in these stocks is finally in.... no new demand driver.

Speaking of.... the company will report earnings today...

New York Times: At McDonald's the Happiest Meal is Hot Profits (what struck me in this story is how Europe has passed the U.S.