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Fellow Fools,

You have no doubt heard about the "historic" buying opportunity the market is giving us right now.  Well I have news for you: this buying opportunity is going to get even better.  How much better?  Well, according to my research, the S&P should be trading around 650 in a year's time.

I know that sounds crazy, and crazy predictions deserve explanations.  I'd love to give you the rundown here, but the Motley Fool does not allow pictures in our blogs, and my explanation requires a few charts.  To that end, I have created a blog post on Wordpress for your viewing pleasure:

http://shouldertap.wordpress.com/2011/11/07/the-big-picture/

Given this backdrop, what should we do?  Go all cash?  Bonds?  Gold?

It's hard to say, really.  Crashes and recessions have this habit of separating the men from the boys, and companies that buck the trend in a downturn are never obvious outside of hindsight.

Personally, I'm going to stick with companies that have already proven themselves in the last two crashes.  Here are three of them: Coca-Cola (KO), Altria (MO), and Waste Management (WM).

In the Dot-Com bust, the market lost 50% from March 2000 to October 2002.  During that time span KO was up 0.16%, MO up 97.81%, and WM up 68.2%.

In the 2008 Financial Crisis, the market lost 58% from October 2007 to March 2009.  During that time span KO, MO, and WM fell 25.59%, 22.03%, and 26% (respectively).

Here's to market beating returns the third time around . . .

*Note: Above performance figures do not include dividends 

 

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