Monday, April 27, 2009


Our 24 hour, omnipresent news coverage is working overtime on the swine flu outbreak. Before long we will all be paranoid, wearing masks, and hunkering down. This 24 hour news phenomenon has already infected many of our government and business leaders. We are experiencing a pandemic of Spine Flu. The lack of spine and conviction. 

Rather than addressing the economy's problem, too much inappropriate debt, and accepting the penalty, years of pain and unwinding, our governmental leaders are throwing massive amounts of money at the problem with little regard for the consequences. Our corporate leaders have cut people and capex to the detriment of customer service, after years of bloated staffing. 

I prefer investing in companies that are run by management that hasn't been affected by Spine Flu. Companies that haven't felt the need to close lots of facilities and layoff thousands of employees because they didn't hire and expand recklessly. Several such firms are Flowers Foods[FLO], Aaron Rents[AAN], K-12[LRN], and Waste Management[WMI]. All are expanding operations, not contracting, during this downturn. Management showed spine by not over hiring/building during good times which has allowed them to respond to opportunities that have presented themselves during the downturn. While these companies haven't appreciated like the cheap stocks have, they have room to appreciate and they shouldn't crash like many cheap runners are apt to. Growth in safe industries [bread,furniture rental, education, garbage/energy] should be a good place to ride out the Spine Flu. 

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