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With the Federal Reserve hawkishly indicating that interest rates could remain high as long as 2026, you're going to see a lot of investors looking for safety plays in order to hedge against doldrums in the stock market.
One of the classic "blue chip" stock categories is automobile companies, mainly because Ford Motor Company (F) and General Motors Co (GM) are household names. And with the United Auto Workers on strike, the auto sector is back in the news in a big way, so the renewed interest here doesn't surprise me.
The trick to finding the best opportunities among car companies is to play both the long game and the short game at the same time. On the far horizon, we know that all the talk is about electric vehicles and driverless automation, but a lot of the plays in that arena are very speculative. We're still a long way off from a future where infrastructure will allow for EVs to be the norm.
In the here and now, the best way forward is to do some good old-fashioned Economics 101 and see who comes out on top - who's profitable, who's loaded with debt, and who's got the most growth potential in a business sector that's been hit hard by runaway inflation, tightening consumer credit availability, and flagging sales.
For the biggest winners and the worst losers, check out this week's video:
Anyone who's been following me for a while knows that I've been shouting from the rooftops about the business sectors that are going to get hit hardest by the Fed's "higher for longer" strategy. Now that we've got definitive signals that they're committed to keeping rates high, more pain is potentially on the way, especially for commercial real estate, which is caught in the middle of a debt crisis and changing attitudes about the nature of work.
But here's the thing - there's as much, if not more, money to be made in a down market than in an up market, and savvy investors who know what to look for have made a killing every time real estate has slumped.
This time will be no different, except for one thing - I want as many people as possible to join in on Wall Street's game. So I've prepared a full briefing for you - check it out here.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.