Is there any question just how tough times are getting? If you do have questions, just turn on the television and tune into CNBC and see how the stock markets here in America as well as overseas are reacting. The stock market is not the only market that is lousy these days though. The housing market is crashing HARD and the credit market is following suite. But with hard times come opportunities. Opportunities to make money by putting on your thinking cap and finding companies that will stand the test of the economic downturn and possibly even flourish in them.
Consider than three fast food giants that are publicly traded on the New York Stock Exchange (NYSE) in McDonalds (MCD), Burger king (BKC) and Yum Brands (YUM). Now we all know who McDonalds and Burger King are, but in case you don't know, Yum Brands owns and operates fast food restaurants such as KFC, Pizza Hut, Taco Bell, Long John Silver and A&W All American Foods (source: finance.yahoo.com). It is in such tough times that these three may mot just do well, but very well.
As of this writing (October 27, 2008) the Dow and NASDAQ are nearing 5 year lows. Everything is getting sold off and I do mean everything. But these three companies seem to be holding up better than the rest of the market. McDonalds closed the day at 51.76 which is not even close to it's 52-week low of 45.79. Burger King closed the day at 17.20, which is just a tick off it's 52-week low of 17.08. Yum brands finished the day at 26.24 also nicely away from it's 52-week low of 22.51 and closed up $0.22 in a day where most of the market was down notably (source: finance.yahoo.com). While it may not seem like a ton, they are considerable off their lows (with the exception of Burger King). But it's going forward into the inevitable tougher times that these companies can really see some improvement.
After a while all the panic selling in the stock market will subside and the prudent investors will once again re-enter the stock market and seek companies that are going to make money. While the American people as a whole will spend less on things like going out to eat and entertainment, they will never the less spend money. The average family that used to go to a fancy restaurant once per week may not visit the fancy restaurant, but they still are going to want to go out. Enter fast food.
Families will view time together at McDonalds or Burger King as better than no time together at all. Besides, everyone wants a break at times from cooking. So these companies that were once considered a quick choice (and possibly the last resort), will now become the preferred (whether forced or not) dinning establishments of Americans. To those of you reading this, please do not run right out and buy the stocks that are featured in this article. Instead, do some research of your own, which may include you talking to your financial advisor. But keep in mind, with the months and possible years of hardship to come, ask yourself where you and your family will be dinning this weekend. Then remember that most of us Americans are in the same boat.
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