Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Dirty Clothes are Big Business, Whirlpool and Mastercard

Companies / China Economy May 18, 2007 - 12:13 AM GMT

By: Michael_K_Dawson

Companies Long regarded as the world's growth engine the U.S. economy is currently experiencing a rough patch. This was highlighted by first quarter GDP of 1.3% down from an annualized rate of 2.5% in fourth quarter 2006. Anticipating the slow down, Wall Street analysts lowered first quarter S&P 500 earnings from 8.7% in January to 3.3% by the first of April. However, after all is said and done it appears as though Wall Street's concerns were for naught. Earnings will be closer to 9%, better than the historic average. How could this be?


Whirlpool was amongst the first reporting companies to highlight that international sales were offsetting declining U.S. demand. Afterwards, many multinational companies echoed similar sentiments. Low and behold, the U.S. had sneezed and the rest of the world hadn't caught a cold. This gave the talking heads something new to talk about. Head after head began repeating the global growth theme. Every CNBC viewer should now know that there is a high probability that large caps will outperform small caps due to their exposure to international growth as well as the currency benefit. A lower dollar relative to foreign currencies translates into increased revenue for U.S. based companies selling products overseas. 

Fortunately, I was reading and listening to the right people and have been leveraging this theme for the past three years. Initially by purchasing suppliers of natural resources such as copper, aluminum and iron ore - the least common denominator of infrastructure projects like highways and bridges. Over time the portfolios have expanded to include other supporting companies like heavy equipment manufacturers and engineering companies ( see latest portfolios ). 

The industrializing countries are starting to reap the rewards of their investments. Millions of people in countries such as China and India are moving, for the first time, into houses with running water and indoor plumbing. Imagine the demand created for basic household appliances like refrigerators and washing machines. 

Merrill Lynch in a report released on April 20 identified five key trends in the Chinese economy from 2007-2010. The first and most relevant to this article is an anticipated boom in consumption. “Income growth has been accelerating slowly but steadily, providing solid support for retail sales growth in China. Consumer credit will become popular.” Merrill Lynch has obviously been paying close attention to companies such as Whirlpool and MasterCard. 

Whirlpool:

On April 24, Jeff M. Fettig, chairman and chief executive of Whirlpool, said "Each of our international businesses reported strong sales growth and operating profit for the quarter." Sales grew 29% in Latin America representing almost a fifth of the company's revenue demonstrating the high contribution of international sales.

Whirlpool

MasterCard:

On May 2, Chris McWilton, MasterCard's chief financial officer, said "There is a U.S. perception that everyone has credit cards, but that's not true in international markets like Singapore, Asia Pacific, Latin America and the Middle East." He said those regions prefer "cash to plastic," and that it represents an opportunity to expand MasterCard's business.

MasterCard

As themes evolve, we as traders must evolve to continue profiting. The proverbial “money burning a hole in ones pocket” appears to be a universal concept. A May 15 Bloomberg report, “ China Retail Sales Rise 15.5% as Wages Grow ,” drives home this point. 

It looks like it is time to revitalize the old global growth portfolio by including some of the MasterCards and Whirlpools of the world.

 

By Michael K Dawson
http://www.thetimeandmoneygroup.com/

Copyright © 2007 Michael K Dawson
Michael K Dawson founded the Time and Money Group with the aim of educating and sharing 20 years of experience on how to reach financial freedom. "Financial Freedom is freedom to focus on what is truly important to you and your family without having to trade time for a wage. It is enabled by a portfolio of income producing assets, managed by you, which generates sufficient income to cover your yearly expenses on an ongoing basis. It provides both time and money". The intent of his website is to become a repository of information to put you on the fast track to becoming financially free. For further infromation visit http://www.thetimeandmoneygroup.com/


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in