Who profits in a recession?

[Apollyon]

Who makes bank during a recession? And my question isn't "who profits from it" but "who profits in it?" (Then again, that could be the same thing.)

Now, this is NOT a political question as to the state of the economy right now - it's solid dollars and sense. The one myth is the pawn shop industry, as they themselves say that, the better the economy is, the better they do.

Anyone have any input?

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[Jocomama]

Can you give an example of recession, as they tend to have a larger range than one can use to answer your question.
What type of bank? What is the cause of the recission; war, natural disaster, major power change in large GNP country (i.e. Russia split from USSR)

Pawn shops do great in a negative economy. The loan money at high rates based upon collateral. If the loan is not payed back with interest in 3 months, the propery is owned by the store.
My friend owns one of the countrys largest shops outside Detroit Michgan. In poor economy, jewelerey is pawned. Now it depednd on the gold trade, but right now it's hot. So I dont know if his shop does better under better economy. Would not make sense.

Who makes bank during a recession? And my question isn't "who profits from it" but "who profits in it?" (Then again, that could be the same thing.)

Now, this is NOT a political question as to the state of the economy right now - it's solid dollars and sense. The one myth is the pawn shop industry, as they themselves say that, the better the economy is, the better they do.

Anyone have any input?

 

[jkhamlin]

Who makes bank during a recession? And my question isn't "who profits from it" but "who profits in it?" (Then again, that could be the same thing.)

Now, this is NOT a political question as to the state of the economy right now - it's solid dollars and sense. The one myth is the pawn shop industry, as they themselves say that, the better the economy is, the better they do.

Anyone have any input?

I'm a little rusty on my stock knowledge, but I believe that short selling is what you are looking for. It assumes that stock prices will go down. What you do is sell stocks that you "borrow" based on the current value which you assume is over valued. Then, when the price goes down, you buy up more shares to replace what you "borrowed." You make money off the deal.

 

[Apollyon]

Can you give an example of recession, as they tend to have a larger range than one can use to answer your question.
What type of bank? What is the cause of the recission; war, natural disaster, major power change in large GNP country (i.e. Russia split from USSR)

Pawn shops do great in a negative economy. The loan money at high rates based upon collateral. If the loan is not payed back with interest in 3 months, the propery is owned by the store.
My friend owns one of the countrys largest shops outside Detroit Michgan. In poor economy, jewelerey is pawned. Now it depednd on the gold trade, but right now it's hot. So I dont know if his shop does better under better economy. Would not make sense.

"Make bank" is a term referring to making large profits or large amounts of money.

The 'recession' I speak of is the downturn in economy that uses the definition that is followed by the US government - decrease in the real GDP for two or more consecutive quarters. My question is, what industries profit in a recession?

Short selling is a rather volatile option, at least for me (but jkhamlin is right - you sell stock you don't own, then buy back at a lower price, and pocket the difference - but, if it goes up, then there's a "margin call", where you have to make up the difference - can be very ugly).

 

[etf]

typically consumer goods companies do well in bad economies. for instance - altria: people will be smoking marlboros when the economy is good or bad, and maybe when it's bad people smoke more. also jnj - people always need band-aids. if interest rates go down, then banks profit off of the interest rate spread. etc.

 

[etf]

and i don't think shorting is a real way to profit during a recession, since it is a typically short-term move (you're not going to hold a short position for 2 years, unless you're doing some type of convertible arbitrage), while a recession could last a while.

 

[jkhamlin]

and i don't think shorting is a real way to profit during a recession, since it is a typically short-term move (you're not going to hold a short position for 2 years, unless you're doing some type of convertible arbitrage), while a recession could last a while.

It depends on the stock, and it depends on the recession. Sure it is a short term move. If stocks are declining, then you can conceivably do it, even in a recession. In fact, you probably are not going to do it in a bull market.

 

[Miami_med]

Bankruptcy Attorney

In all seriousness, anyone in commodities can profit from a recession. Buy during the recession, hold until the economy recovers, and sell at a profit. This works for real estate as well (unless a correction in overpriced real estate or an overpriced commodity was one of the major causes of the recession).

There are a number of other ways to profit during specific market conditions, but that would depend on why there was a recession.

 

[Jocomama]

YES - thanks etf!:

typically consumer goods companies do well in bad economies. for instance - altria: people will be smoking marlboros when the economy is good or bad, and maybe when it's bad people smoke more. also jnj - people always need band-aids. if interest rates go down, then banks profit off of the interest rate spread. etc.

 

[Piskaupf]

Woah I wonder if Apollyon is Dr. Michael Burry

 

[DexterMorganSK]

Woah I wonder if Apollyon is Dr. Michael Burry

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