Without debating the probability of it actually occurring, which (if any) stocks ought to do well in an environment of declines in the overall market?
"Do well" does not "beat the market" by falling less than other stocks, it means that the price should actually rise and represent a profit when compared to holding cash.
The hypothetical scenario, which is possible, is as follows:
*Geo-political strife in the Middle East increases. Oil prices move to the front page of major newspapers.
*Stock market indexes throughout the world enter a steady decline. Assume the All Ords loses 40% over 18 months.
*General economic activity slows, house prices fall, the media talks of a recession. Non-oil commodity prices slump in response to the economy. The Australian Dollar falls sharply.
Now, without arguing whether or not the above is actually likely to occur, which stocks (if any) should INCREASE in price under such a scenario?
Gold and oil are obvious so we'll leave them out. Any thoughts on other industries or individual stocks which would actually benefit from such a bearish scenario?