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My Favorite Doomsday Stock

Contrary to popular belief, I'm not rooting for a doomsday scenario. Nor do I believe any of the nonsense about the Mayan calendar, or any of the fundamentalist Christian proclamations that the end is nigh.

Sure, the end gets nigher every day, but that's a function of time and its tendency to move forwards, not backwards.

But I'm sure you know people who actually believe that President Obama is some form of the anti-Christ and that the Mayan calendar spells our doom later this year.

Or maybe you just know some people who are so afraid of a second Obama term that they just want to err on the side of caution and load up on guns, ammo and non-perishable food.

I make no judgment on these people – but we know they exist. After all, I own guns, gold and non-perishable food. That doesn't make me crazy, nor does it mean that I'm hoping or anticipating doomsday.

But there are significant investment implications.

I first alerted Resource Prospector subscribers to my favorite "doomsday" stock, Sturm, Ruger & Co (NYSE: RGR) back in May of 2010.

The stock traded for about $15 back then – and it's only gone higher since. Today, RGR sells for $47 a share.

I'm not comfortable buying shares at this current price, but I think we're likely to see lots of these doomsday type stocks ramp higher heading into the November elections. Think companies like Procter and Gamble (NYSE: PG), Costco (NYSE: COST) and Kraft Foods (NYSE: KFT).

Again – try to separate the idea that you should own these stocks because you necessarily believe that we're headed for some apocalypse scenario, and think of the people you know who are likely to bolster the bottom lines of these companies.

For instance – right now Ruger has stopped taking new gun orders. They currently have a huge backlog of gun orders to process before they'll take any new orders. So there's lots of pent up demand that should push this stock further.

We'll see similar demand for packaged food, gold, silver, medical supplies, ammunition, farming equipment, etc. – as regular people buy just a small amount of preparatory supplies "just in case."

Ruger looks a bit overbought at this point – but take a look into the doomsday sector for stocks that haven't yet skyrocketed.

Good Investing,

Kevin McElroy
Editor
Resource Prospector Pro
 

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