Where To Put You Money When The S&P 500 Bottoms

13 October 2008 12 views No Comment

Last Thursday, October 9th 2008, I predicted the market would be hitting rock bottom by May, 2009.

With that in mind, investors who had their money on the sideline, or who have taken advantage of bearish market levers such as puts and shorts have a massive advantage in their ability to buy into positions very cheaply. If you have any cash ready to invest over hte next 6 - 9 months, PAY ATTENTION!

History and Sector Rotation Show Us Where To Invest:

Those of you who have been reading this blog for a while know that I’m a huge proponent of using sector rotation to help find profitable trades. Following the sector rotation model, transports and financial are typically the first sectors to recover.

Now I’m not saying you should go buy up bank stocks right now; while I do like Goldman at these levels, there is still too much uncertainty in that sector for me to bet my money on.

However, with oil prices and hence diesel prices dropping to more reasonable levels, I believe the transports sector is a great place to start looking for some great investments. I decided to put together a basket of stocks that are my favorites.

My Favorite Transport Picks

A few notes. I consider all except one of these picks to be longer term investments of 9 - 18 months, with HUGE profit potential (think double and triple baggers). The one exclusion actually looks pretty solid from a technical standpoint at this very instant. I have picked 6 stocks which I believe will be great long term bullish investments with opening price targets.

I’ll reveal 2 stocks today, and one stock each day this week starting Tuesday.

So, without further adieu, here’s my basket of picks:

Hunt Transport (Symbol JBHT) - Trucking

This is my favorite pick from the transports. Even after all the tumult in this market, JBHT has only come down to the support of a 5 year uptrend line. with a current closing price of 27.70, I see no reason for this stock not to double by the end of 2009.

Seacor Holdings Inc (symbol ckh) - Waters Transports

At $45 - 50 per share, Seacor is a bargain! It hit a low of $51.60 on Friday, and I think it’ll hit the target buy point fairly soon. It might be worth picking up 1/4 of a position here just in case though. This stock was in a great 4 year uptrend right until diesel hit $5 per gallon.

With a PE of 6.71, the stock is incredibly cheap, being less than 1/2 the sector average and 33% less than the industry average.