The stock market is discounting the high probability of a global recession. Prior declines of similar magnitude preceded the recession in the mid-1970's and the depression in the 1930's.

The stock market's decline is not only a function of magnitude, but also time. As the market continues to decline, stock selection will be more important than usual. Avoid stocks with high debt levels. For now, concentrate on high quality companies with stable and consistent cash flow. Also, focus on stocks with high dividend yields (above 5%), which should give additional support.

OPPORTUNITIES

Stocks in the Consumer Staples sector have traditionally performed better than the stock market, and especially cyclical companies, during market declines. The fundamental explanation is that food, beverage, household products and cosmetics companies manufacture and market brand name consumable products, most of which are considered essential to daily life, such as food, drink, toothpaste, deodorants, toilet paper, etc.

Since product demand is

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The stock market is discounting the high probability of a global recession. Prior declines of similar magnitude preceded the recession in the mid-1970's and the depression in the 1930's.The stock market's decline is not only a function of magnitude, but also time. As the market continues to decline, stock selection will be more important than usual. Avoid stocks with high debt levels. For now, concentrate on high quality companies with stable and consistent cash flow. Also, focus on stocks with high dividend yields (above 5%), which should give additional support. OPPORTUNITIESStocks in the Consumer Staples sector have traditionally performed better than the stock market, and especially cyclical companies, during market declines. The fundamental explanation is that food, beverage, household products and cosmetics companies manufacture and market brand name consumable products, most of which are considered essential to daily life, such as food, drink, ...

Feel like getting angry? Treasury publishes latest debt/deficit details… But Fed now encouraged to intervene more… latest data show historic inflation drop… How to invest accordingly? Burritt on near-term trading, Grantham on the long haul… Byron King explains why $40 oil is “worst of both worlds”… Bill Jenkins explains the dollar’s recent downturn… Plus, the Dububble expands… refrigerated beaches on UAE shores…

However dire you think U.S. government’s fiscal condition has become… today we learn it’s even worse. For starters, would you invest in this business?

2008 fiscal year net operating cost: $1 trillion. Triple that of 2007. And those aren’t funky alternative accounting methods… today’s charts and numbers come directly from the 2008 Financial Report of the U.S. Government, issued yesterday.

What is “net cost”? It is “computed by subtracting earned revenue

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Procter & Gamble (PG) declared that sales will be lower than expected in the second quarter due to the waning economy.

The leading consumer-products maker said that organic sales growth, excluding the impact of acquisitions, divestitures and foreign exchange, would miss its estimated range of 4% to 6%.

PG expects annual organic sales growth between 4% and 6%.

For the fiscal second quarter, the Cincinnati-based company is expecting earnings of $1.58 to $1.63. PG has forecasted earnings between $4.28 and $4.38 per share for the year.

Analysts expect the company to earn a profit of $1.56 in the current quarter and $4.28 this year.

PG is a Zacks #3 Rank ("Hold") company.

"PG" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

The Procter & Gamble Company (

The Procter & Gamble Company's (PG) management is committed to a growth strategy based on (1) driving volume through product innovation and increasing penetration into developing markets and (2) expanding profitability by focusing on higher margin categories.The plan is meeting with success in terms of top-line expansion, volume growth, and higher earnings. Though the Gillette acquisition was accretive to earnings in fiscal 2008, the gross margin was negatively impacted by increased commodity and energy costs.Taking advantage of recent market weakness that drove P&G's stock to an attractive valuation level, the stock was upgraded to a Buy. The target price of $72.50 is based on a 20 P/E on trailing 12-month earnings.Read the full analyst report on PG "PG" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

Come Wednesday morning – after the presidential election tomorrow (Tuesday) – the United States will have a new commander-in-chief. The president-elect will face some significant challenges: A weak economy (okay, a recession, given last week’s gross domestic product (GDP) report, which confirmed just how dire the country’s economic situation had become).

While this week’s data from the manufacturing and housing sectors will be eagerly anticipated, nothing compares to Friday’s reports on unemployment and the picture of the ailing labor market.  After nine consecutive months of job contraction, few analysts hold out much hope for optimism.  In fact, some believe the jobless rate will climb to 7.5% during 2009.

Clearly the new president will have some major problems to solve, perhaps the biggest being that he’ll have to find a way to restore investor confidence.

After all that’s happened in the global economy and in the stock market in recent weeks – with the

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Benjamin Graham, the teacher and mentor of Warren Buffett, wrote two seminal tomes on value investing called Security Analysis in 1934 and The Intelligent Investor in 1949. I was reading The Intelligent Investor at a time when the bear market following the dot com bubble was in full swing and I remember thinking to myself that some of what Mr. Graham mentions in his book may no longer hold true as even at that point  it was almost impossible to find stocks that met his criteria such as a Price/Book ratio of less than 1.5, a P/E < 15, uninterrupted dividends for last 20 years and an adequate margin of safety. If you like bargain hunting for things, you are probably aware that there is an intrinsic value to things and unless the seller is in distress it is very difficult to ...

In this feature, we turn our attention to General Motors (GM), Johnson & Johnson (JNJ), Wal-Mart (WMT), Chevron (CVX) and Home Depot (HD).

One of the hallmarks of this bear market has been how indiscriminate it has been.  Companies that are likely to be absolutely devastated by the economic slowdown are getting whacked almost as much as those that should do just fine.  To illustrate this, one needs go no further than the Dow 30.

Below we present the 30 blue chips sorted by how much they have declined over the last year.  All but one of them is down.  Yes, two of the firms that are likely to suffer the most are at the top of the list, General Motors (GM) and Citigroup (C).  However, the relative positions of many of the others simply

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Even a relatively savvy investor might have a tough time keeping things straight regarding Treasury bailout proposals that have come out in the past few days. Director of Zacks Equity Research Dirk van Dijk, CFA was on hand recently to help boil this issue down for us.

WhatÂ’s the main difference in the Treasury bailout plan from Senator Chris Dodd from that of Treasury Secretary Henry PaulsonÂ’s the previous day?

The Dodd plan has far stronger oversight provisions than the Paulson plan, which has virtually none, and explicitly disallowed any review by the courts or any other agency. In the Dodd plan, there would be monthly reports to Congress as well as weekly press reports on the progress of the plan. There would be an oversight board, which would include the heads of the Federal Reserve, the SEC, the FDIC and one non-governmental employee picked by each party.

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