Amid the Turbulence, Infrastructure and Basic Materials Provide Long-Term Growth

Last week was not pretty,with the Dow Industrials closing under
12,000, down 464 points or 3.8% for the week. The financials had
another tumble, setting a week-long negative tone with a decline of
4.7%. Oil, another wet blanket for equity bulls, had a wild week (to
include hitting an all-time high) before settling almost unchanged
above $134. Are the markets going lower?

I have long been bearish on the financial and the consumer
discretionary sectors, though I am no longer significantly short. (In
retrospect, I probably should have waited longer before covering some
of those positions!) As the financials continue to get abused, is now
the time to buy? From my perspective, the answer remains no -- there
remain too many unknowns, leaving significant downside risk. There may
be a "pop," but betting on that is more of a gamble than an investment.
Financials will no doubt continue to be volatile; there is certainly
money to be made on a good "guess," but there is also much money to be
lost on a bad one.

Of course, with this attitude, I will likely miss
the first part of this sector's recovery; I am fine with that, as the
current risk/reward ratio is just not attractive for most financial
firms. However, I am interested in a few, primarily in niche markets
that stand to profit from the current turbulence -- one of those is
Assurant (AIZ), in which I recently established a long position (through options).