Reeltime Rentals Inc (RLTR)

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Recession Proof Investments

Entertainment & vices

It’s expected that when money is running dry, people clamp up their wallets. Fortunately for the entertainment and vice industries, the opposite is true. The 1930s, the decade of the Great Depression is also commonly referred to as the Golden Age of Hollywood. Names from movies of this era remain familiar today, like Bob Hope and Shirley Temple.

While the real world is causing problems, people are seeking an escape from reality. During a recession, people are more likely to take a big vacation, indulge in some tobacco or liquor, or hit the movie theaters.

From an investment standpoint, you can take advantage of this by making recession-proof investments in companies that cater to this audience. Consider Diageo (NYSE: DEO), which distributes a wide variety of alcohol products like Smirnoff vodka and Johnny Walker whisky. CNBC expects U.S. consumers to continue to buy more alcohol during 2008, particularly higher-end labels.

Additionally, with Diageo’s exposure to China and some pundits thinking that China is in for a big market fall, there may be many disheartened investors in Asia looking to drink some of their problems away. In terms of rewarding investors, Diageo is no slouch, paying out a 4.1% dividend yield.



stocking up
One of the most basic lessons we all learn in economics is that our capitalist machine moves in cycles. Recessions are a natural part of growth and provide some rest and breathing room for the economy to regain its strength for the next run. If you are smart and have a long-term plan, recessions can be one of your best buying opportunities as an investor.

Warren Buffet suggests to “look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”





http://www.askmen.com/money/investing_200/209b_investing.html





Quote 03-19-08

"Yes, we must, indeed, all hang together, or most assuredly we shall all hang separately." ~Benjamin Franklin to John Hancock