Stealth Bull Market in Consumer Stocks

Wall Street Journal (Our younger sibling) writes…

This recession is going to reshape America for generations, including the way we live and work. What will the future look like? Who will be the winners and losers?

Obviously you could make a lot of money if you guess right.

It’s only six months into the crash, but the stock market is already starting to make some early calls. The market isn’t a perfect seer of the future, but it has a pretty good track record. And a few of the calls it’s making now are challenging the conventional wisdom.

IPhone nation lives. Shares in cellular companies tanked when the crisis first hit. Sprint crashed 85%. Apple fell by more than half. The conventional wisdom: Cellular contracts and fancy handhelds are very expensive. Even a $60 a month habit is costing you $720 a year. Desperate consumers would drop these plans, or scale back sharply, as they were forced to slash their household budgets.

So far? The market’s having a dramatic rethink. Shares in cellular companies have jumped about 40%, on average, from their November lows. During that time the rest of the market has gone nowhere. Sprint’s doubled from its distressed levels. Apple, Black Berry’s Research In Motion, even Palm have risen a long way.

The reason: Maybe post-crash America won’t junk its fancy handhelds after all. “We’ve learned this recession that wireless has become more of a necessity,” says analyst Tim Horan at Oppenheimer. “We haven’t seen a lot of people dropping their cellphone service.”

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