December 21, 2009
Gold. Silver. Oil. You hear and read plenty lately in the media about these red-hot categories. Often (far too often) investors tend to focus on what's hot, what's getting the buzz on CNBC, what they hear on the radio or read online. Gold seems to be getting the most buzz, with prices at record highs and people clamoring to buy like it's going out of style. Could gold actually be going out of style? Price-wise, that is? Don't look for it to continue it's nearly straight-up trend. To me it sounds like an echo of 1980.
Back to the eternal question for investors: how to profit in the financial markets? Making real money in the markets is a boring game, one with little excitement, but with profits for investors who ignore hype and hoopla and focus on fundamentals. Like soap. Or toothpaste. Or shampoo. Proof? This morning's wire brings news that Swiss drug maker Sanofi-Aventis is buying Chattem for $1.9 billion. Chattem's not-too-exciting products include Selsun Blue shampoo and Gold Bond medicated powder. Sure, their products don't quite carry the cachet of gold or silver. But check out the 34% premium paid by Sanofi. Clearly they are willing to bet on Selsun Blue. And that's the takeaway. Think about the products and services you use every day. You are not alone; every day people wake up and take a shower, brush their teeth, drive to work, have a cup of coffee or tea. You get the idea. While some will chase the chimera of the latest fad, think about investing where money is made every day. Think about shampoo.
(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).