#1 Stock to Buy in 2009: Google (GOOG)
I bet you found this page through Google, eh? If not, you probably used the company’s search engine within the past 24 hours. I have to admit, Google is my favorite stock to buy in 2009. I believe it is the pre-eminent company in the world today, one with vast capabilities to invent huge and totally new markets (blue oceans as they like to say nowadays). Furthermore, while Google may bow down to its end-user a little bit too much, it is the Big Bully to any other company online who gets in its way or has something it wants. Like Warren Buffett, I am always looking for stocks that have that special extra something; I believe he simply calls them “great, wonderful companies”.
But no stock is worth buying if it’s not the right price, right? Google was selling near $715 in December 2007. A brief trip over to Finance shows me that you can now buy their stock for $330.16. While this is still a P/E ratio of 25, I personally have much confidence that the Big G will grow earnings better than expected throughout the next five years. They have quite a good history of positive earnings surprises, only one of the reasons they are top on my list of stocks to buy in 2009.
#2 Stock to Buy in 2009: General Electric (GE)
Even more so than GOOG, GE is embedded into your everyday life. Most of the time though, you don’t realize it. Here is a list of some areas they operate in:
- aircraft engines
- power generation
- water processing
- security technology
- medical imaging
- business and consumer financing
- media content
- industrial products
Whether you’re watching The Celebrity Apprentice, getting an x-ray, putting an alarm system in your office, or flying to Hawaii for a one-week vacation, GE is making money off of you. So doesn’t it make sense to cash in on yourself buy buying some GE stock? Especially this year, as it has fallen to 14 year lows! It’s mind-blowing to me that this stock has fallen to such lows – they are the best diversified company in the known universe! This is the time when fortunes are made. Plant your seeds with a long-term view of the future. And like Buffett says…
“Be greedy when others are fearful.”
Ask yourself these questions: "The stock market has dropped by 50% since 2008, but has the amount of economic activity I see going on around been cut in half? Am I spending half of what I was a year ago? If I still have a job, am I being paid half of what I was last year?"
The answers are probably no. And what does that mean? That it’s time to buy stocks. The government, however inept it obviously is at meddling in the affairs of the market, cannot and will not (cross your fingers) let the recession become a depression. Obama needs business to profit. I know I am ready to buy stocks in 2009, and to ride the market back up when sanity soon returns.