I love how Roubini has become a household name (I can say I know him before he became famous!). It seems that the markets are testing the lows quite and despite the fits and starts, we will make a comeback. 

Still, during the bear’s 18 month reign of terror, healthcare has arguably held up the best. Just take a look at Vanguard Healthcare ETF *VHT) vs ETF sector funds like Tech (XLK), Energy (XLE), Consumer (XLY), Utilities (XLU), and Materials (XLB). 

But, the hot money has been pouring into materials and technology. Momemtum investing typically favors growth industries and that will likely come from technology stocks. 

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Nokia (NOK) is the biggest maker of mobile devices. It has 40% of the global market share and dwarfs LG, Samsun, and Motorola. It has the #1 marketshare in nearly all markets and sells over 90% outside of the US.

Its next place of growth wil come from cell phone purchasers in places like China and India. It has figured out the manufacturing so well that the company can earn over 15% even on the entry-level units while Samdun, its more profitable competitor, earns about 13%. 

Nokia will also try to grow its service offerings to include music and games and GPS. It’s also just a great way to build brand equity. 

Right now its main competition is in the smartphone arena where RIM and Apple dominate. Still, Nokia has purchased Symbian and tried to open-source it. It is touch and go because if this model of leveraging the collective intellect fails, they could fall behind in this crucial segment of the market.

Nokia currently has a earnings yield of 12.6% which is really quite cheap for such high markets, return on capital and dividend yield. There are no serious competitors in the low-end market and it is unlikely to be challenged. So Nokia remains a great buy due to a poor longer term outlook that will put a low ceiling on its earnings multiple.

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Given its value proposition, Walmart continues to appeal to a broad segment of the consumer population given the current economic conditions. Did you know that it is now the  largest grocer in the US? (Ahead of Kroger) and along with pharmacy and electronics?

They are doing very well in places like South America. Its PE ratio is at 15x which is higher than the markets but that’s expected because of its regular earnings. Besidse, did you know that their earnings are growing at 10% annually and that is announced a dividend increase? (in this economy?!) 

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