In an interview before his 87th birthday, Warren Buffett gave his thoughts regarding the current economic climate and how it will affect stocks. He remained bullish on stocks over bonds in the long term and praised central bank action following the 2008 Financial Crisis. Buffett also said he was most concerned about weapons of mass destruction falling into the wrong hands and believed this was the biggest threat to the market.
These comments came after Bridgewater CEO Ray Dalio penned a letter in late August in which he predicted that politics would have the greatest effect on the stock market since the tumultuous 1930s. In light of this incendiary political environment and its ability to rock the market, investors should be eyeing stocks that will see success in the midst of strife.
BlackBerry Ltd.
BlackBerry Ltd. (TSX: BB)(NASDAQ:BBRY) has completed a transformation to focus on security software in a time when cybersecurity is becoming a major focus for governments and corporations. Microsoft Corporation revealed in a recent intelligence report that cyberattacks were up 300% on the cloud platform in the past year. Worldwide spending on information security is expected to reach over $110 billion by 2020 compared to the ~$90 billion that will be spent this year.
BlackBerry security software is already used by 16 G20 countries around the world. In June, the U.S. military announced that it would use BlackBerry’s AtHoc Crisis Communications Platform. Investors have grown impatient of late with BlackBerry stock as it has seen a 20% drop in a three-month period as of August 30. BlackBerry is in a fantastic position to benefit from the massive growth that will come in the cybersecurity industry. Keep in mind that many of the nations that use this technology are still in the early stages of formulating cybersecurity policy, which will be much more fleshed out in the years and decades to come.
Barrick Gold Corp.
Shares of Barrick Gold Corp. (TSX: ABX)(NYSE: ABX) have increased 6.6% in a one-month period as of August 30. Geopolitical tensions and the threat of war on the Korean Peninsula sparked a rise in precious metals prices. Gold prices are now sitting at the highest point seen in 2017. On August 30, market technician Louise Yamada said that with US$1,300 broken, the next level is US$1,380. The key US$1,400 level dates back to a four-year base established after gold dropped below this number in 2014.
A demand for safe-haven assets in the midst of the North Korean crisis coupled with the decline of the U.S. dollar have led to the best run in gold in 10 months. The U.S. the government is also being tasked with raising the debt ceiling, which is viewed as an absolute necessity by experts to avert economic catastrophe. The Trump administration also continues to face internal strife and controversy, which is making it more difficult for its pro-growth legislative agenda to be pushed through.
All of these factors are aligning in favour for equities like Barrick Gold Corp.
