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Anorak | Invest In Defence In A Housing Crash

Invest In Defence In A Housing Crash

by | 5th, August 2008

IN the past three housing crashes, do you know which business sector has fired the better?

Answer: Tissues.

No, not really. The answer is defence.

According to Datastream figures, the annualised average change during the past three crashes sees an investment in the defence sector return 53.1 per cent.

Compare that to, say, real estate services (0.2 per cent down) or –get his – oil, which fell by 19.3 per cent.

And since July 2007, shares in defence have gone… up, by 8.3 per cent. And shares in, say, auto & parts have sunk by 42.6 per cent.

So if a recession is coming, and those housing stocks are falling like a home in a Buster Keaton movie, where might you consider putting your money on, or placing your bets for or against?

One year ago, a share in Cobham would have set you back 192.75p. The same share now cost 207.5p. Cobham makes equipment, specialised systems and components used within the search and rescue, civil and defence aviation, marine, aerospace, homeland security and communication markets.

The Cobham spread for December is 208.4 to 209.6. For September it’s 207.4 to 208.3.

Shares have risen by over 25p in the past month. Had you bought £10 a point one month ago, you’d have won a nice sum.

So defence goes up, maybe. And oil goes down. Yeah, oil.

Know that:

Oil prices sank below the $120 level for the first time since early May while base metals and grains retreated as selling pressure swept across commodity markets on Monday.

A sell on Tradefair when oil hit £140 a barrel earlier in the spring and you have won big.

You’d have won big…



Posted: 5th, August 2008 | In: Money Comments (3) | TrackBack | Permalink