Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
JOHNSON & JOHNSON (JNJ) Big Pharama AI Mega-trend Investing 2020 - 25th Jan 20
Experts See Opportunity in Ratios of Gold to Silver and Platinum - 25th Jan 20
Gold/Silver Ratio, SPX, Yield Curve and a Story to Tell - 25th Jan 20
Germany Starts War on Gold  - 25th Jan 20
Gold Mining Stocks Valuations - 25th Jan 20
Three Upside and One Downside Risk for Gold - 25th Jan 20
A Lesson About Gold – How Bullish Can It Be? - 24th Jan 20
Stock Market January 2018 Repeats in 2020 – Yikes! - 24th Jan 20
Gold Report from the Two Besieged Cities - 24th Jan 20
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20
Stock Market Final Thrust Review - 19th Jan 20
Gold Trade Usage & Price Effect - 19th Jan 20
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

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/


© 2005-2019 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

6 Critical Money Making Rules