![]() ![]() I’m talking about companies that pay big dividends and those that actually thrive amid runaway inflation. I’m talking about energy, semiconductors, and pharma. These kinds of companies historically thrive during even the harshest recessions because none of us can live without what they do or make. ![]() The companies that make the “stuff” society needs for daily life. The smart move to make for 2023 is still in the stock market – not at the companies that make headlines, but the companies that make the things none of us can live without. Those companies are in an increasingly deep hole as the interest rates they pay on their insane debt becomes lethal. ![]() Putting your faith in the Big Tech darlings that led the bull market would be an even bigger mistake. ![]() Investors feel like their backs are against the wall, and for good reason we’re already in a bear market in the United States… and the recession technically hasn’t started yet.īut going to cash would be a mistake – if only because that cash will lose nearly 10% of its value every year. The Fed means to stop inflation in any way it can, and if that means hurling the United States (and, let’s face it, most of the world) into a recession, then that’s just what it will do. Fed Chair Jerome Powell confirmed the pace of interest rate hikes is set to slow in 2023, but that’s a far cry from stopping the hikes or loosening policy. The Federal Reserve continues to raise interest rates into a weakening stock market and softening economy. Finally, Lynch named American drug distributor McKesson as his third stock pick, saying it's in the "top one percentile earnings predictability in a recession.The stock market is way down over the past year – the NASDAQ Composite is off nearly 30% and the S&P 500 is down almost 20% as of early December 2022. "I think investors are really ignoring the tremendous business that's grown in the last several years on their music publishing assets … They're making tremendous progress on that," he said. "So for all those reasons, it's got some growth metrics." Sony is another stock he also said "trades very cheaply." Lynch said it's a good sign that Microsoft offered Sony a 10-year contract to make each new release of Call of Duty available on Sony's PlayStation console at the same time as the U.S. "They … already had strong physical search capabilities, the cloud artificial intelligence business, the autonomous driving standard for China, all sorts of research and development that is finally monetizing, and a percentage of the revenues outside of digital search is expanding," Lynch said. He said Baidu is "so darn cheap" and will benefit from China's reopening and the artificial intelligence trend. Two of them are Asian stocks: Chinese search engine giant Baidu and Japanese conglomerate Sony. Stock picks Lynch named three stocks he said are cheap right now. "What's interesting is international stocks are much cheaper," he said. " "Effectively, once the bubble burst there were all these asset classes that had really attractive valuations." Though Lynch said that doesn't necessarily mean history is going to repeat itself, he added that valuations are - as they were then - a lot more attractive outside of the growth stocks. "To us this looks a lot like the tech bubble in 1990s when tech gave the world massive outperformance over value, over mid cap small caps, international stocks," he told CNBC's " Street Signs Asia. Seven companies - Apple, Microsoft, Nvidia, Meta, Tesla, Amazon and Alphabet - account for 95% of the S & P 500's total return in the first quarter, he noted. "The S & P 500 supported by a few expensive mega cap techs," said Eric Lynch, managing director of Scharf Investments. The S & P 500 is "supported" by just seven mega-cap tech stocks right now - and it's starting to look a lot like the 1990s tech bubble, one analyst told CNBC on Wednesday. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit ![]()
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