Sunday morning I found myself in the family room pedaling furiously on my spinning cycle while watching John Steinbeck’s classic film adapted novel, The Grapes of Wrath, with a young Henry Fonda and slew of other Hollywood stars cutting their teeth to make a name for themselves. For the record, it is both one of my favorite novels and movies as it deals with a period in American modern economic history that chronicled the desperate times of the dust bowl and economic depression.
As I invested myself emotionally into the story and physically into my bike, I could not help but draw some parallels to today’s financial crisis:
- cataclysmic events that trigger and facilitate enormous transfers/evaporation of wealth
- the advent of new technologies and innovations altering demographic landscapes
- exploitation of economically disadvantaged people by special interests business groups which are often aided by the apathy or legislative participation of government accomplices
- the willingness of so many to accept injustice without much protestation or in some instances prone to misguided anger.
Now, I will be amongst the first to proudly acknowledge America’s social and economic progress during the post-depression era. Besides, investment ideas, which I shall eventually get to, and not critical comparisons between the past and the present is the purpose of this article, so I will refrain from doing such.
However, somewhere between my cinematic indulgence and adrenalin surged workout, I did draw some inspiration from the movie and the speeches of Ma Joad and Tom Joad. In fact, they actually helped to put things into perspective for me. Here is Ma Joad’s below:
AL: Whatsa matter, Ma? Gettin’ scared?
MA: No. Ain’t ever gonna be scared no more.
(After a pause)I was, though. For a while I thought we was beat–*good* an’ beat. Looked like we didn’t have nothin’ in the worl’ but enemies–wasn’t nobody frien’ly anymore. It made me feel bad an’ scared too–like we was lost… an’ nobody cared.
AL: Watch me pass that Chevvy.
PA: You the one that keeps us goin’, Ma. I ain’t no good any more, an’ I know it. Seems like I spen’ all my time these days a-thinkin’ how it use’ta be–thinkin’ of home–an’ I ain’t never gonna see it no more.
MA: Woman can change better’n a man. Man lives in jerks–baby born, or somebody dies, that’s a jerk–gets a farm, or loses one, an’ that’s a jerk. With a woman it’s all one flow, like a stream, little eddies, little waterfalls, but the river it goes right on. Woman looks at it like that.
AL: Look at that ol’ coffeepot steam!
PA: Maybe, but we shore takin’ a beatin’.
MA:(chuckling): I know. Maybe that makes us tough. Rich fellas come up an’ they die, an’ their kids ain’t no good, an’ they die out. But we keep a-comin’. We’re the people that live. Can’t nobody wipe us out. Can’t nobody lick us. We’ll go on forever, Pa.
We’re the people.
I chewed on her words for a while and revisited my impressions from Apple’s quarterly report last week. I remember marveling at how this company seemed to be somewhat impervious to this recession. I also remember Apple being down and out in the decade of the 1990’s, (Don’t worry, this report is not about Apple. Everyone already knows or should know the Apple story by now.) But like Ma Joad, I believe that one must “keep a-comin’…” and if you are an investor then it is important to identify those companies that just “keep a-comin’…” no matter what.
And of course there is Tom Joad’s infamous “I’ll be there” speech:
“…I’ll be all around in the dark. I’ll be ever’-where – wherever you can look. Wherever there’s a fight so hungry people can eat, I’ll be there. Wherever there’s a cop beatin’ up a guy, I’ll be there. I’ll be in the way guys yell when they’re mad – I’ll be in the way kids laugh when they’re hungry an’ they know supper’s ready. An’ when the people are eatin’ the stuff they raise, and livin’ in the houses they build – I’ll be there, too.”
With sincere humility, I certainly do not regard myself as the reincarnation of Tom Joad, but I do honor the spirit of the man (even if he is an idealized fictitious character) and good-willed intentions of his words. Therefore, in the spirit of altruism and the democratization of financial data and research, I share this short list of stocks that I believe to have a sufficient quantity of the tough stuff to “keep a-comin’…” no matter what.
While they may not share AAPL’s business model, they do share a consistency in delivering strong sales and earnings results. First, we identify companies with positive sales and earnings surprises that have exceeded consensus estimates by at least 5% for the last two reported quarters. On an annual basis, they must also produce positive earnings over the past 2 consecutive fiscal years and positive sales growth during the previous 3 consecutive fiscal years. Last but not least, the companies can rate no lower than neutral (i.e. C on a scale of A to E) on Hillbent’s proprietary grading system. In this environment, none of these are an easy feat to accomplish. From a universe of 3000 companies (includingADRs ) with a minimum average daily volume of 100k, the results yielded only 10 companies.
Here are the 10 companies for reader’s reference. As always, I encourage further research and due diligence as the list is merely a starting point and not intended for specific recommendations or regarded as an entire portfolio. Anyone who wishes to obtain a premium version of the report which entails more in-depth analysis and commentary may contact market-condition at hillbent dot com.
Well the movie ended and so did this report that I wrote in my head while riding my bike. The screen was originally inspired from Apple’s quarterly results last week but formlated while watching The Grapes of Wrath.
The challenges and obstacles to future economic growth in America are legitimate, but there will be viable investment opportunities on U.S. exchanges for domestic and international securities. I am optimistic that the next 50 years will propel America to even greater levels of progress. Whether we will remain the world’s largest economy in the future is not nearly as important as remaining one of the strongest.
Whether you are a bull or bear, it is time to stop worrying about what has been lost or permanently changed. Just keep a-comin’ and when you get there you just might find the ghost of Tom Joad. I will be there for my children and my children’s children and their children. That’s America and we are the people! Until then, here’s a little bit of Rage Against the Machine for more inspiration:
Click for Audio
Originally published at Hillbent.com and reproduced here with the author’s permission.