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"Tidal-Wave Economics:" Investing in the $789B Stimulus Bill
Posted Feb 12, 2009 10:50am EST by Aaron Task in Investing, RecessionBut the makeup and composition of the bill - wonderfully detailed here by the Washington Post - is almost irrelevant given the size of the package, says James Altucher, managing partner of Formula Capital and author of The Forever Portfolio.
"Forget trickle-down economics, this is tidal wave economics," says Altucher, who offers three stimulus-related stock picks:
- Astec Industries: "The Amazon.com of asphalt" will benefit from increased spending on highways and trades for less than 5x EBITDA.
- Lindsay Corp: Another play on infrastructure spending, they specialize in safety products like highway barriers.
- Family Dollar Stores: With $20 billion of the bill allocated for food stamps, Altucher says stores like Family Dollar will maintain their recent recessionary revival.
Still an unrepentant bull, Altucher believes the market remains cheap but doesn't expect the stimulus bill to really affect the economy until late 2009, or the market to anticipate its boost until mid-year; clearly, there's no immediate market love been given to the bill.
Disclosure: Altucher has no direct positions in stocks mentioned by the hedge funds he invests in may.
206 Comments
Ryan - Thursday February 12, 2009 11:07AM EST
Its official, the beginning of the worst administration this country has ever seen. It is going to be a long 4 years. And if you thought Bush overspent you ain't see nothing yet. 1 trillion on toilets . . . nice comparison . . you are a moron with out any macro economic sense. government can't create jobs long term. plain and simple.
Yahoo! Finance User - Thursday February 12, 2009 11:10AM EST
What does the stimulus package do to help all of the sales people who've lost jobs and other white collar workers? Will someone train them to use a hammer or lay bricks?
Yahoo! Finance User - Thursday February 12, 2009 11:10AM EST
Dow 50,000 by 2035, in your dreams dude!
Yahoo! Finance User - Thursday February 12, 2009 11:13AM EST
I hope he was given a hall pass to waste everyones time with this polyanna drivel on techticker. So he was wrong before about being bullish and techticker decides to bring him back to be wrong again. And just where is this kids parents to stop him from making stupid statements like these?
chubby - Thursday February 12, 2009 11:15AM EST
I like this guy. "The Amazon.com of Asphalt." Let him talk instead of Geithner.
Yahoo! Finance User - Thursday February 12, 2009 11:18AM EST
I hope he was given a hall pass to waste everyones time with this polyanna drivel on techticker. So he was wrong before about being bullish and techticker decides to bring him back to be wrong again. And just where is this kids parents to stop him from making stupid statements like these?
__A_YAHOO_USER__ - Thursday February 12, 2009 11:19AM EST
Won't make much difference when prices suddenly soar for the working poor, as to many dollars chase to few goods............HELLO?.......this Stimulus is a trick to recapitalize the Trumps of the World, by creating Hyper-Inflation.
Fred - Thursday February 12, 2009 11:20AM EST
Tidal wave as in "King Canute" who could not will the tides to go out.
- Thursday February 12, 2009 11:23AM EST
give the benefits, credits, whatever to the people that were affected, not to the people that caused or benefited from this crisis. All you here is about in the big cities crying, not the small town America.
Terry F - Thursday February 12, 2009 11:25AM EST
This bill does nothing for housing, Does nothing to save homes, Does nothing to promote buying homes. Housing is the key to the thing and nothing is in here for housing. What happened to the tax credit for home purchase. The bill that was or is being passed is pork barrel and will do little to nothing for the economy. It's an Obama payback for getting elected. Obama will be a one term Jimmy Carter. What a bafoon.
William O - Thursday February 12, 2009 11:26AM EST
LET'S GET THIS RIGHT: $800,000,000,000 DIVIDED BY 4,000,000 JOBS= $ A LOT OF MONEY PER JOB. HERE'S AN IDEA TO INCREASE SPENDING: SEND OUT CHECKS TOTALLING $ 800-BILLION TO EACH OF THE 4,000,000 LOOKING FOR WORK AND I'LL BET YOU'LL STIMULATE THE HELL OUT OF THE ECOMOMY. AND RIGHT NOW, TO BOOT! NO WAITING. NO TRICKLE-DOWN. RIGHT NOW! STUPID IDEA? SURE, BUT IT MAKES ABOUT AS MUCH SENSE AS WHAT WE'RE DOING NOW. DOES ANYONE ELSE REMEMBER WHEN RINGLING BROS WAS THE MOST ENTERTAINING CIRCUS OUT THERE? PATHETIC!
Mark - Thursday February 12, 2009 11:29AM EST
what a moron.....food stamps are a play on dollar stores......I wonder does he even know what a food stamp is.....This guy is invested in hedge fund of hedge funds....Sounds like Maddoff has his money too
shags1_23 - Thursday February 12, 2009 11:31AM EST
The only reason Obama will fail is because he's trying the same method as Bush: throw money at the immediate problem and don't think about the long term solution. And, just stay out of it; let the bad companies fail. Just goes to show: no matter who you vote for, the government wins.
joseph - Thursday February 12, 2009 11:31AM EST
I am an admirer of President Nguyen Thieu. He knew how to handle those who nessed up markets and tried to monopolize. We also had a phrase in Vietnam: "Terminate with extreme prejudice." There are a number of bankers and other financial leaders who deserve this phrase
shags1_23 - Thursday February 12, 2009 11:32AM EST
The only reason Obama will fail is because he's trying the same method as Bush: throw money at the immediate problem and don't think about the long term solution. And, just stay out of it; let the bad companies fail. Just goes to show: no matter who you vote for, the government wins.
Brian C - Thursday February 12, 2009 11:34AM EST
at least this administation is trying to do something, u people think that this will correct itself by doing nothing? no way. this has an awful domino effect that will not be stopped without intervention.
Yahoo! Finance User - Thursday February 12, 2009 11:37AM EST
More like DOW back UP to 8000 in 2035. Don't let the DOW hit you on the way down.
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Roger P - Thursday February 12, 2009 11:03AM EST
Dow 50,000 by 2035