It could be the end of the world as we know it...
and yet still, somebody, either very greedy or extremely smart (your opinion) will be making money off a stock. Remember the now famous Jim Cramer line "There is always a bullmarket somewhere....". Well it is true. No matter what happens, there are always stocks that are going up while every other stocks are heading straight down. You have to play it off depending on the crisis or situation. For example...oil has been hovering around 67-70 a barrel and gas is at an all time high in the mid to high 3 dollar range- what do you do? You buy oil and gas stocks. So what happens when an unfortunate disaster such as the horrible Hurricane Katrina hits state side and causes massive damage (not to mention ruining many lives =( )? You have rubble and debris and broken buildings, and total chaos. What do you do? Well you could donate to the Red Cross and other legitimate organizations. How about something even better? You can trade in company's that will benefit from the his horrific disaster and use some or all of your earnings to donate and help those less fortunate. I think that would be the more sensible and compassionate way to play off this disaster. What ever happened has already happened. The only thing we can do is at least have something good come out of it and at the same time help those in need. Now this idea of using proceeds is not my idea, but an idea that has surfaced on other blogs and websites notably those that deal with the stock market. My idea is just a variation of the central, core idea. For instance I got the idea from one of the best traders/investors in the biz (at least I feel that way personally), Charles E. Kirk over at http://thekirkreport.com.
So what stocks could we use to help? First I would like introduce the Building-Heavy Construction Industry group. I have to include Sterling Construction Co. (STV), at 22.85. I think it could come down a little in price. Just keep your eye on it and buy on the big intraday dips. Overall this is a great company that has just started to heat up and grab investors attention. My target for this company is $25.12 for starters.
The 2nd stock in the Building-Heavy Construction industry group that I would like to point out is, Goldfield Corp. (GV). GV is a tiny stock in the same industry as STV that has been gaining a lot of attention as well as volume because it is also involved with rebuilding what Katrina has destroyed. There has been some insider buying as of late as well. The stock is currently priced at 1.14 which is near its 52wk high. I say this stock doubles and at least goes to 3.20 and change. I do believe that GV is riskier than STV so don't go crazy and buy a ton of shares. Just a small position between 1000-4000 shares tops. It's up to you but I wouldn't risk it all.
When I see the aftermath of the storm on t.v., with all the debris and rubble on the ground, I am always able to see construction machinery sifting through the rubble. The company's that are doing all the hard work are the ones in the machinery-Construction/Mining Indusry. The two stocks that I like in this group are, Caterpillar Inc (CAT) and JLG Industries (JLG). CAT is currently at 58.29, which is not bad. My target for CAT is 63.57. If it can hold and break this, then it is off to 65/66.35 easily. JLG also supplies the construction machinery, just like CAT. Although it doesn't have the same brand name exposure, doesn't mean that it doesn't produce just as effective machinery. JLG is currently residing at the 33.30 price level. I say it first goes to 37.57. After that it has to attack the 40's and break thru, which I believe is achievable in time.
Once the construction companys clear the rubble with the construction machinery provided by CAT and JLG, it is time for companys such as Eagle Materials (EXP) and Florida Rock Industries (FRK) to lay down the concrete, cement and other sediments for the foundation of new homes and properties in place of the ones lost (Building-Cement/Concrete/Aggregates Industry Group). EXP is the higher priced of the two, weighing in at a hefty $113.19 per share. Believe it or not, EXP still has room to run. My 1st target for EXP is 121.34 as well as a 2nd target of 136.78. FRK is without a doubt poised to benefit since it is based in the Florida area. Those that have kept an eye on FRK will notice that it had dipped as low as 49 a few days ago, only to shoot up to 60.00 a share. I hope some of you grabbed some when it had the big dip. Regardless, Katrina has brought more life into FRK. Now FRK is resting at 58.25. You can buy here or wait for a small drop to 57.25. My first long target is 60.35. 2nd target is 65.23.
Finally, I have to mention the Building-Construction Producers Industry Group. These companies work with the homebuilders to complete construction of new homes. Some notables that will benefit are USG Corp (USG) at 67.50, Simpson Manufacturing (SSD) at 38.18 and LSI Industries (LYTS) at 15.00. My target for USG is 74.56. The Target for SSD is 44.17. Finally, the target for LYTS is 21.56.
Remember, if you plan on donating profits, you should contact the Red Cross Organization or your preferred organization. Just make sure they are collecting money for the victims of Katrina. Last but no least, have fun trying to raise the money whether it is for charity or for your self.
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