March 16, 2011
In mid-February the Dow Jones Industrial Average was just shy of 12,400. As I write this the Dow stands at 11,700, a 5% selloff. What merits the decline? Typical economic concerns, profit taking after a 10-week rise of 12%, and of course the situation in Japan are all weighing on stock prices.
But will all the media noise affect earnings or dividends at First Niagara Financial, a mid-sized bank in Upstate New York? How about Pepsi: other than people on Japan's affected coast unable to get to a vending machine, do you think that soft drink consumption will be greatly altered by current events? AT&T? Have high school students paused their texting frenzy? Verizon? Will their subscribers stop pining for the iPhone? Really?
You get the idea. Good companies with good business remain a reasonable risk. With people scared and prices down, these are the times when profits are possible if you keep your eye on the long term.
(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).