January 6, 2010
Lately there is much reading of tea leaves in attempts to determine the direction of the US economy. Are we in recovery? Still in recession? Or are we recovering only to suffer a "double dip", where we come up but then go back down? The answers are never obvious. To get a confident sense of direction I prefer to look in the shadows, in out-of-the-way spots that don't get the same attention as General Electric or Exxon Mobil. I look to the small, the lesser-known, the obscure. Here's what I am seeing: a report this morning from RPM International, a smallish company ($2 billion market cap), maker of paints and coatings, best know brand is Rustoleum. RPM announced sharply higher earnings and raised their forecasts. Another: Lincoln Electric, another $2 billion company serving mundane markets (in this case welding supplies). Lincoln has also been raising forecasts. It is from raindrops like these that rivulets form streams and then rivers. Our economy is gathering steam, and the march of obscure is to me a clear sign that the US economy is on the mend.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).