|Dow||-107.06 to 17,172.68|
|S&P 500||-16.11 to1,994.29|
|Nasdaq||-52.10 to 4,527.69|
|10-YR Yield||-0.02 to 2.566%|
|Gold||+$0.30 to $1,220.10|
|Crude Oil||-$0.93 to $91.48|
I’m not going to lie. I like to indulge in a couple of fried chicken wings or tenders on football Sundays. And chances are, I’ll wash them down with a nice, cold IPA or Hefeweizen. Heck, if the New England Patriots offense keeps playing like it has been so far this season, I may need an extra one or two!
But the rest of the week, I do my best to eat and drink healthy. Grilled chicken or tuna fish sandwiches for lunch, with a side of fruit or celery or carrots. Lean chicken or pork for dinner, along with vegetables, a salad, some brown rice or quinoa. That’s the kind of stuff on the menu most of the time.
It’s not just the kind of foods my wife and I eat, or feed our kids, either. It’s where we buy them, and how much more attention we pay to who supplies them.
If we can find reasonably priced natural or preservative free options, we’ll take advantage of them. We’ll also increasingly shop at more specialized grocery stores or butchers or niche beer and wine vendors, rather than the mainstream, traditional “big box” stores.
We’re far from alone, too — and it looks like corporate America is catching on to the ramifications! Think about one of the biggest food industry mergers this month: General Mills’ (GIS, Weiss Ratings: B) purchase of Annie’s (BNNY, Weiss Ratings: C) for $820 million. GIS pretty much HAD to do that to boost its organic/natural food credibility, because that’s where the growth is!
Campbell Soup (CPB, Weiss Ratings: B-) did something similar back in 2012, when it agreed to buy Bolthouse Farms for $1.55 billion. Faced with slowing sales of traditional, high-sodium canned soups, CPB snapped up Bolthouse to get its hands on the company’s healthy salad dressings, fresh veggies, smoothies, and more.
|Investors might want to take a healthy approach to eating — and investing.|
Heck, even chocolate giant Hershey (HSY, Weiss Ratings: B) tried to “go healthy” (in a manner of speaking!) by purchasing Brookside Foods back in late 2011. The company makes thinks like dark chocolate-covered goji berry and acai berry candies.
Then there’s the dramatic expansion we’re seeing of specialty grocers — not just the long-term leader Whole Foods Market (WFM, Weiss Ratings: B-), but also privately held Trader Joe’s, Sprouts Farmers Market (SFM, Weiss Ratings: C), and The Fresh Market (TFM, Weiss Ratings: C). Two of those chains recently opened new outlets in our general area, and we really enjoy shopping at one of them on occasion.
|“As an investor, you may want to pick and choose through the grocery and food aisles.”|
I’m not one of those people who will tell you how to eat or where to shop. That’s your personal choice. But I DO think as an investor, you may want to pick and choose through the grocery and food aisles.
Some of these stocks have gotten downright cheap, even as the overall trend toward healthier living and eating shows no sign of letting up! It’s all part of my strategy of finding niche, powerful bull markets — sectors and companies that can prosper because of specific reasons that have nothing to do with macroeconomics, monetary policy, or any of those big-picture market drivers.
So what are you doing in your own kitchen? Are you eating healthier these days? Is that being reflected in where you shop and what you buy? Do you see much of a difference between a Publix or Kroger (KR, Weiss Ratings: A-) and a Whole Foods or Fresh Market? Have you invested in any of these kinds of stocks, and made or lost money doing so? Let me know at the Money and Markets comment section below.
|Our Readers Speak|
Where are stocks headed? What are interest rates going to do? You certainly had a lot to share on those topics recently!
Reader Glenn said the following in response to my view that the Federal Reserve is laying the groundwork for interest rate hikes before long: “They really can’t raise interest rates because if they did, the expense of the national debt would bring this country down. Just consider if we had to pay 7 percent interest on the national debt — there would be little left over for anything else.”
Meanwhile, Reader Gordon R. said the following on stocks: “The market is an overbought bubble and will soon begin a severe downturn; perhaps, just a correction, or something more serious. Time will tell.”
Thanks for the input. But as I’ve made clear, I’m much more worried about BONDS than STOCKS here — especially in light of the clear turn we’re seeing in the Fed’s interest rate positioning. I’m not saying we’ll see a 7 percent federal funds rate anytime soon. But I do think the era of 0 percent rates is coming to an end, and soon.
That should be bad news for bonds first, as well as interest-sensitive stocks. Later on, as rates rise far enough, fast enough, and for long enough, it will become a headwind for the broader stock market!
As for fixing the system of out-of-control banks — and know-nothing, do-nothing regulators — Reader Gerald K. said there’s a simple fix. His view:
“The real problem, of course, is the REVOLVING DOOR between government regulators and those whom they are supposed to regulate. The CURE is relatively simple — close the damned door by forbidding employment in the regulated industry for a period of six years. This is not rocket science and is long overdue.
“Washington, D.C. is increasingly seen as a place where people go to get rich by selling our country down the drain and placing their own interests and agendas far above any consideration for what is good for our country and good for American citizens.”
Great insight Gerald! Many of today’s policymakers and regulators just view their time at federal institutions as a stepping stone — one that ultimately leads to incredibly lucrative, private sector lobbying, consulting, or other work.
As if that’s not enough, those who royally screw up the system and torpedo the economy with their foolish policies then go out and write books and give speeches or private talks to groups of well-connected, rich investors — often at six figures a pop. (Cough, Geithner, Cough, Bernanke, Cough). What a mess, huh?
Keep those comments coming everyone by clicking here. I’ll do my best to address as many as I can.
|Other Developments of the Day|
- Merger Monday Deal #1: Siemens of Germany (SIEGY, Weiss Ratings: B-) agreed to buy Dresser-Rand for $7.6 billion to add oil field equipment to its suite of industrial products.
John D. Rockefeller Sr. made his billions from the oil business. But his surviving heirs and charitable foundation are swearing off the fossil fuel industry. Specifically, the foundation called the Rockefeller Brothers Fund plans to sell oil and gas stocks. It’s part of a publicity campaign to promote alternative energy and combat the buildup of greenhouse gases.
Investor buyers have lost their ardor for snapping up single-family homes to rent out, just as I forecasted them to. Overall existing home sales sank 1.8 percent to a seasonally adjusted annual rate of 5.05 million in August, missing expectations. Investors accounted for the lowest share of purchases in five years.
Reminder: You can let me know what you think by putting your comments below.
Until next time,