Don Coxe thinks basics like food and energy are the places to be. For food, he suggests farm-equipment. A friend was telling me that her financial adviser had her back in Caterpillar CAT. She has been in and out of the stock over the years, each time with significant returns. She is sure that this time is no different. So, maybe it is time to add some Caterpillar. It isn’t exactly into food productions, but roads and infrastructure are pretty basic, and in need of maintenance and repair. Dividends are currently over 4% so this is in the income asset class.

Good old John Deere DE could be poised for good things. Now that is your basic food production bet. We visited Landmark Winery in Napa. The great grand children of John Deere are the owners and still in the agra-business. They have the best assortment of John Deere merchandise – napkins and key ring for first brother who is restoring a vintage Deere tractor. Some John Deere stock for me. The dividend yield around 3.4% isn’t too wonderful, but this is the stock equivalent of comfort food.

Fred says…

• S&P PEs need to get to about 7. Given that they are currently almost 19 today in November 2008, there is a way to go there
  http://tal.marketgauge.com/dvMGPro/charts/charts.asp?chart=PERATI
• Gold will go back up. The current $740 is a result of the carry trade unwinding – the US dollar is strong right now and gold is cheap briefly. Gold ETF (GLD)
• Gold producers in stable countries will be good bets. AEM
• good tech stocks will be ok, especially solid software companies – Microsoft (MSFT), Sybase (SY), Adobe (ADBE)
• Bonds aren’t a good idea, especially given Bernanke’s determination to avoid the mistakes of the past – deflation and depression, at all costs.