Asked by Anonymous
Updated on 18 Apr 2019
I once read this book called Gone Fishing with Buffett. Inside, the author described a scene where there was an on-going recession. "Buffett" then asked the author to head on to the malls to observe and identify brands.
The author noticed grocery stalls still having hordes of people. Similarly with fast food chains. People still have to spend, hence your payment technologies i.e. Credit cards. But luxury and branded stores has a significant reduction in human traffic flow. When one falls ill, one still has to visit the doctor although, depending on the seriousness of the sickness, they may head on to more affordable medical outlets i.e. Polyclinics
So, the moral of the story is, think of what a general consumer cannot do without in their everyday lives (even in a recession) -Staples, Transport, Food.
Definitely Healthcare, consumer staples and ultilities. Now I wouldn't call them absolutely recession proof per say, but they do have really low betas, meaning they aren't sensitive to the movements of the market. So when the market goes down, these industries may not go down at all, or may go down just alittle, as a reflection of reduced spending power of the economy and slightly lowered demand for these goods. But usually, since they are part of our basic needs, they shouldn't go down by much.
Top Contributor (May)
Healthcare, vice, and consumer staples. These are more defensive industries. A full on recession will of course still affect them, but less so than technology for example.
Some would say Commodities and FMCG (fast moving consumer goods) because food is something that people will have to eat even in a recession.
Ideally it’s towards the more common man segments (eg milo and maggi mee)
Nestle has been a very good example of this.