| Recessions are a nasty thing. Officially a recession | | | | America, Budweiser and Bud Light. The company was |
| occurs when we have two consecutive quarters of | | | | founded in 1852 and has been very successful ever |
| negative GDP. If you don't know, GDP stands for | | | | since. Look back in time and you'll see how well the |
| Gross Domestic Product. It's simply a measure of all | | | | stock's held up during tough economic times. |
| the goods and services we produce as a nation. | | | | Unfortunately Anheuser is no longer a good |
| Growth is a good thing . . . negative growth is bad. | | | | investment. InBev, the large Belgium brewer, recently |
| As it now stands, we're not in a recession. But it sure | | | | struck a deal to acquire Anheuser. I consider investing |
| feels like one. The unemployment rate's been rising. | | | | in BUD now to be dead money. |
| This means people are losing their jobs. And many | | | | My other investment choice is Molson Coors Brewing |
| more are afraid of losing their jobs. The housing crisis | | | | (TAP). |
| continues and the credit crunch has made it all but | | | | Molson makes Coors Light, Molson Canadian, Coors, |
| impossible to borrow money. Consumer confidence | | | | Killian's Irish Red, Keystone, Blue Moon and Zima. This |
| numbers are dropping like a rock. | | | | last quarter has been a rough one for them. Despite |
| That's not good when most of our economy is | | | | revenue growing 5% in the quarter they were |
| based on consumer spending. | | | | hammered by increasing costs. The company was hit |
| Forget GDP. Forget the "official" definition of a | | | | on three sides with higher energy costs, higher grain |
| recession. This economic upheaval is continuing to | | | | costs, and a higher tax rate. This along with one-time |
| destroy investment portfolios, and we need to shift | | | | and special charges of more than $103 million cut their |
| into recession proof investments. | | | | earnings by 56%. |
| Now, there's not really a recession proof investment. | | | | I know that sounds scary, but I see it as an |
| There are however certain investments that hold up | | | | opportunity. |
| better than others during recessionary times. I wrote | | | | These one-time and special charges are a way for |
| about this very fact about 6 months ago. | | | | the accountants to mess up the numbers and justify |
| In that article I suggested shifting a portion of your | | | | their high fees. If you remove these charges the |
| portfolio into two companies who could provide | | | | company actually made $0.93 per share for the |
| growth in any economic environment. Molson Coors | | | | quarter. Still less than expected . . . but not as bad as |
| Brewing (TAP) and Anheuser-Busch (BUD), both | | | | originally thought. |
| companies are in one of my favorite industries - | | | | Over the longer term, the industry is growing and the |
| alcohol. | | | | business is strong. The company's been able to pass |
| For those of you who followed my advice, you'd be | | | | along price increases to customers. As they get |
| up about 27% on BUD and basically flat on TAP. | | | | costs under control, it sets up the company for |
| Now I really like Anheuser as a long term investment. | | | | strong results going forward. The stock is down on |
| They've captured almost 50% of the market and | | | | the recent news. I think it's the perfect opportunity |
| make some of the most popular beers in all of | | | | to add more to your portfolio. |
