Magazine article Black Enterprise

Stealth Fighters

Magazine article Black Enterprise

Stealth Fighters

Article excerpt

Old Economy stocks come to the defense of some investors

They're back.

It seems like the so-called Old Economy is having its day. For the past year, most of the attention has been placed on technology stocks and the sector's volatile nature. Now, many investors are rotating out of the tumultuous tech sector and into stocks that are less prone to short circuit.

Call them stealth stocks. They include defense, paper, and consumer-products industry picks. For example, look at the performance of the Dow during the middle of the third quarter. In the week of August 7; the blue-chip index rose an impressive 260 points, or 2.4%, to 11,027, breaking the milestone mark for the first time since the second quarter. The Dow was led by farm equipment manufacturer Caterpillar (NYSE: CAT) and tobacco company Philip Morris (NYSE: MO).

Another slumping stock that is currently on the rise: the Class A shares of Berkshire Hathaway (NYSE: BRK.A). Yes, financial wizard Warren Buffett's Berkshire Hathaway. Pummeled by a tech-driven market and concerns about Buffett's health, shares of Berkshire, with such holdings as Coca-Cola (NYSE: KO), American Express (NYSE: AXP), and Gillette (NYSE: G) stock, slid 41.71% by mid-March from its high of $70,000 in January 1999. Since that period, the stock has risen more than 50%. Granted, not many of us can afford the world's most expensive stock: As of August 11, one share sold for $62,400.

What has powered these stocks? Investors continue to be encouraged by news of tame inflation and a slower economy. …

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