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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (49996)	4/24/2006 12:26:16 AM
From: Perspective	Respond to of 116555

Actually I was just referring to companies that don't have materials costs as an appreciable component of their input costs - ones with mostly labor costs. Perhaps software companies, maybe some other tech. Probably not consumer discretionary. I'm thinking that off this list: biz.yahoo.com the idea would be to short materials intensive, economically sensitive sectors like most of the consumer goods, maybe industrial goods, and airlines. Services, healthcare, and technology may outperform as their input costs aren't rising as fast as the others. The basic materials will go the way of the Fed's choice on commodity inflation. And I'm hoping anyway that the financials will eventually get it, but I'm afraid that they'll hang in there longer than we can possibly imagine. I'm also beginning to appreciate what O'neill has said regarding the importance of industry groups. The business cycle and the Fed actions tend to enrich different sectors at different times. The last few years the ball went to real estate and the basic materials companies. The next few they will hand it off, and if anyone can pick it up it will be those that have only labor costs. BC